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 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,
Date of reporting period:		June 30, 2019

Item 1 - Report to Shareholders

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Active International Allocation Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	9
Statement of Operations	11
Statements of Changes in Net Assets	12
Financial Highlights	14
Notes to Financial Statements	18
Investment Advisory Agreement Approval	29
Privacy Notice	31
Director and Officer Information	33

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Active International Allocation Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Active International Allocation Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Active International Allocation Portfolio Class I	$	1,000.00	$	1,147.50	$	1,020.43	$	4.69	$	4.41		0.88	%
Active International Allocation Portfolio Class A		1,000.00		1,145.60		1,018.70		6.54		6.16		1.23
Active International Allocation Portfolio Class L		1,000.00		1,143.70		1,016.17		9.25		8.70		1.74
Active International Allocation Portfolio Class C		1,000.00		1,141.80		1,014.98		10.51		9.89		1.98

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Active International Allocation Portfolio

	Shares		Value (000)
Common Stocks (95.7%)
Argentina (2.6%)
Banco BBVA Argentina SA ADR		63,200	$	715
Banco Macro SA ADR		30,248		2,204
Despegar.com Corp. (a)(b)		28,000		389
Grupo Financiero Galicia SA ADR		47,500		1,686
				4,994
Belgium (1.7%)
Anheuser-Busch InBev SA N.V.		35,512		3,145
Umicore SA (b)		4,583		148
				3,293
Brazil (1.1%)
Banco Bradesco SA (Preference)		46,728		459
Banco Santander Brasil SA (Units) (c)		22,600		268
Itau Unibanco Holding SA (Preference)		42,388		400
Lojas Renner SA		19,580		240
Petroleo Brasileiro SA (Preference)		93,296		666
Raia Drogasil SA		7,400		147
				2,180
Canada (0.6%)
Agnico Eagle Mines Ltd. (b)		21,600		1,108
China (4.1%)
Alibaba Group Holding Ltd. ADR (a)		12,000		2,033
Baidu, Inc. ADR (a)		7,700		904
JD.com, Inc. ADR (a)(b)		6,600		200
Tencent Holdings Ltd. (d)		103,800		4,696
				7,833
Colombia (0.6%)
Banco Davivienda SA (Preference)		45,317		571
Bancolombia SA ADR		10,700		546
				1,117
Denmark (1.8%)
Drilling Co. of 1972 A/S (The) (a)		6,183		481
Novo Nordisk A/S Series B		51,579		2,631
Novozymes A/S Series B		6,145		287
				3,399
Egypt (0.9%)
Commercial International Bank Egypt SAE		383,522		1,677
Finland (0.4%)
Neste Oyj		7,662		260
Nokia Oyj		110,241		548
				808
France (7.9%)
Air Liquide SA		4,946		692
Airbus SE		5,515		782
Bureau Veritas SA		14,281		353
Capgemini SE		4,960		617
Danone SA		27,839		2,361
Dassault Systemes SE		5,767		921
Edenred		13,744		701
EssilorLuxottica SA		4,581		599

	Shares		Value (000)
Hermes International		463	$	334
Kering SA		1,106		654
L'Oreal SA (PAR) (a)		2,311		658
L'Oreal SA (BSRM)		1,420		405
Legrand SA		6,555		480
LVMH Moet Hennessy Louis Vuitton SE		1,997		850
Pernod Ricard SA (b)		4,095		755
Safran SA		3,213		471
Sanofi		20,368		1,762
Thales SA		1,015		126
TOTAL SA		28,333		1,585
				15,106
Germany (10.9%)
Adidas AG		5,217		1,611
Allianz SE (Registered)		8,904		2,146
BASF SE		13,754		999
Bayer AG (Registered)		51,509		3,578
Bayerische Motoren Werke AG		4,266		316
Commerzbank AG		75,123		540
Continental AG		2,122		309
Daimler AG (Registered)		18,270		1,016
Deutsche Boerse AG		4,013		568
Deutsche Wohnen SE		6,663		244
Hannover Rueck SE (Registered)		1,596		258
Henkel AG & Co., KGaA (Preference)		6,784		664
Infineon Technologies AG		33,471		592
Jungheinrich AG (Preference)		10,910		336
Linde PLC (a)		2,130		428
Merck KGaA		4,793		502
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered)		3,877		973
Porsche Automobil Holding SE (Preference)		3,698		240
QIAGEN N.V. (a)		24,063		978
RWE AG		5,480		135
SAP SE		23,453		3,224
Uniper SE		7,027		213
United Internet AG (Registered)		12,921		425
Vonovia SE		6,434		307
				20,602
Hong Kong (0.9%)
AIA Group Ltd.		122,800		1,328
Hong Kong Exchanges & Clearing Ltd.		13,507		477
				1,805
India (7.4%)
Apollo Hospitals Enterprise Ltd.		45,661		899
Ashok Leyland Ltd.		758,490		959
Eicher Motors Ltd.		2,421		673
HDFC Bank Ltd. ADR		10,100		1,313
ICICI Bank Ltd.		258,375		1,639
ICICI Bank Ltd. ADR		8,700		110
ICICI Prudential Life Insurance Co. Ltd.		144,760		817

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
India (cont'd)
IndusInd Bank Ltd.		45,553	$	932
L&T Finance Holdings Ltd.		227,174		379
Larsen & Toubro Ltd.		55,746		1,255
Marico Ltd.		256,793		1,379
Maruti Suzuki India Ltd.		12,004		1,136
Shree Cement Ltd.		4,965		1,570
Tata Consultancy Services Ltd.		31,367		1,012
				14,073
Indonesia (3.2%)
Astra International Tbk PT		1,008,100		532
Bank Central Asia Tbk PT		1,981,900		4,209
Charoen Pokphand Indonesia Tbk PT		406,700		136
Gudang Garam Tbk PT		26,500		144
Hanjaya Mandala Sampoerna Tbk PT		491,700		109
Telekomunikasi Indonesia Persero Tbk PT		2,542,800		747
Unilever Indonesia Tbk PT		80,300		256
				6,133
Ireland (1.3%)
Kerry Group PLC, Class A		4,867		581
Ryanair Holdings PLC ADR (a)		30,704		1,970
				2,551
Japan (10.5%)
Asahi Group Holdings Ltd. (b)		7,200		324
Astellas Pharma, Inc.		21,700		310
Central Japan Railway Co.		2,192		440
Dai-ichi Life Holdings, Inc.		24,400		369
Daiichi Sankyo Co., Ltd.		7,500		392
Daikin Industries Ltd.		4,200		550
East Japan Railway Co.		5,300		496
Eisai Co., Ltd.		5,900		333
FANUC Corp.		5,150		956
FUJIFILM Holdings Corp.		9,800		498
Honda Motor Co., Ltd.		15,113		391
Hoya Corp.		7,800		599
Kao Corp.		8,400		641
Keyence Corp.		2,800		1,721
Kose Corp.		1,100		185
Mitsubishi Corp.		24,300		642
Mitsubishi UFJ Financial Group, Inc. (See Note G)		46,206		221
Murata Manufacturing Co., Ltd.		8,700		392
Nabtesco Corp.		1,900		53
Nexon Co., Ltd. (a)		49,800		723
Nidec Corp.		4,800		659
Nintendo Co., Ltd.		1,808		665
Obic Co., Ltd.		1,300		148
Omron Corp.		4,404		231
Ono Pharmaceutical Co., Ltd.		7,700		138
Panasonic Corp.		19,100		159
Recruit Holdings Co., Ltd.		20,100		672
Santen Pharmaceutical Co., Ltd.		9,100		151
Shimano, Inc.		4,350		646

	Shares		Value (000)
Shiseido Co., Ltd.		10,300	$	778
SMC Corp.		2,105		788
SoftBank Group Corp.		17,400		838
Sony Corp.		33,793		1,766
Tokio Marine Holdings, Inc.		11,620		583
Toyota Motor Corp.		18,155		1,128
Unicharm Corp.		13,300		401
Yaskawa Electric Corp.		2,800		96
				20,083
Korea, Republic of (1.4%)
Samsung Electronics Co., Ltd.		45,636		1,861
SK Hynix, Inc.		12,076		727
				2,588
Malaysia (0.6%)
Public Bank Bhd		205,500		1,144
Malta (0.0%)
BGP Holdings PLC (a)(e)(f)		72,261		—	@
Netherlands (4.6%)
Akzo Nobel N.V.		4,230		398
ASML Holding N.V.		3,770		788
Heineken N.V.		5,442		607
Koninklijke Philips N.V.		65,002		2,823
OCI N.V. (a)		12,960		356
Unilever N.V. CVA		38,935		2,372
Wolters Kluwer N.V.		19,131		1,393
				8,737
Norway (0.7%)
DNB ASA		48,078		894
Subsea 7 SA		36,850		446
				1,340
Peru (1.2%)
Cia de Minas Buenaventura SA ADR		42,331		706
Credicorp Ltd.		7,200		1,648
				2,354
Poland (1.5%)
Dino Polska SA (a)		48,295		1,696
Jeronimo Martins SGPS SA		68,838		1,108
				2,804
Portugal (0.1%)
Galp Energia SGPS SA		12,270		189
Spain (2.2%)
Aena SME SA		4,497		891
Amadeus IT Group SA		19,720		1,561
Endesa SA (b)		29,309		754
Industria de Diseno Textil SA		26,756		804
Repsol SA		12,277		192
				4,202
Sweden (1.8%)
Atlas Copco AB, Class A		12,660		404
Epiroc AB, Class A		35,510		370
Essity AB, Class B		13,601		418

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
Sweden (cont'd)
Hexagon AB, Class B		9,186	$	510
Telefonaktiebolaget LM Ericsson, Class B		181,320		1,721
				3,423
Switzerland (5.7%)
Baloise Holding AG (Registered)		833		148
Geberit AG (Registered)		1,694		791
Givaudan SA (Registered)		246		694
Nestle SA (Registered)		57,551		5,958
Roche Holding AG (Genusschein)		7,231		2,035
Swiss Life Holding AG (Registered)		995		493
Zurich Insurance Group AG		2,096		730
				10,849
Taiwan (1.6%)
Airtac International Group		32,000		360
Taiwan Semiconductor Manufacturing Co., Ltd.		341,000		2,602
				2,962
United Kingdom (9.6%)
AstraZeneca PLC		21,371		1,745
AstraZeneca PLC ADR		9,910		409
BAE Systems PLC		130,645		824
British American Tobacco PLC		32,073		1,119
Burberry Group PLC		8,172		194
Diageo PLC		27,352		1,178
Glencore PLC (a)		94,670		329
Intertek Group PLC		3,793		266
Lloyds Banking Group PLC		483,664		348
Melrose Industries PLC		34,621		80
Prudential PLC		14,422		314
Reckitt Benckiser Group PLC		16,042		1,268
RELX PLC		67,046		1,622
RELX PLC		20,956		509
Rolls-Royce Holdings PLC (a)		510,738		1
Royal Bank of Scotland Group PLC		116,102		324
Royal Dutch Shell PLC, Class A		42,335		1,386
Royal Dutch Shell PLC, Class B		31,111		1,015
Sage Group PLC (The)		72,435		739
Smith & Nephew PLC		35,901		779
Sophos Group PLC		171,452		863
Unilever PLC		44,586		2,769
Weir Group PLC (The)		16,550		325
				18,406
United States (8.8%)
Allergan PLC		2,900		486
Alphabet, Inc., Class A (a)		900		974
American Tower Corp. REIT		2,400		491
Booking Holdings, Inc. (a)		530		994
Bristol-Myers Squibb Co.		12,100		549
Charles River Laboratories International, Inc. (a)		2,300		326
Cognex Corp.		7,900		379
Editas Medicine, Inc. (a)(b)		4,400		109

	Shares		Value (000)
Estee Lauder Cos., Inc. (The), Class A		2,250	$	412
Halliburton Co.		12,600		287
ICON PLC (a)		4,120		634
Intellia Therapeutics, Inc. (a)(b)		6,300		103
Intuitive Surgical, Inc. (a)		600		315
Mastercard, Inc., Class A		3,200		846
Medtronic PLC		11,700		1,139
MercadoLibre, Inc. (a)		700		428
Microsoft Corp.		8,300		1,112
Newmont Goldcorp Corp.		25,000		962
Newmont Goldcorp Corp.		29,323		1,124
Palo Alto Networks, Inc. (a)		2,900		591
PepsiCo, Inc.		3,200		420
QIAGEN N.V. (a)		12,900		523
Schlumberger Ltd.		19,610		779
Transocean Ltd. (a)(b)		208,790		1,338
Visa, Inc., Class A		8,900		1,545
				16,866
Total Common Stocks (Cost $146,821)				182,626
	No. of Rights
Rights (0.0%)
Spain (0.0%)
Repsol SA (a) (Cost $7)		12,277		7
	Shares
Investment Company (0.6%)
United States (0.6%)
Morgan Stanley China A Share Fund, Inc. (See Note G) (Cost $1,324)		56,878		1,237
Short-Term Investments (4.2%)
Securities held as Collateral on Loaned Securities (0.8%)
Investment Company (0.6%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		1,151,473		1,151
	Face Amount (000)
Repurchase Agreements (0.2%)
Barclays Capital, Inc., (2.50%, dated 6/28/19, due 7/1/19; proceeds $53; fully collateralized by a U.S. Government obligation; 3.63% due 2/15/44; valued at $54)	$	53		53
Merrill Lynch & Co., Inc., (2.48%, dated 6/28/19, due 7/1/19; proceeds $299; fully collateralized by U.S. Government obligations; 2.13% - 2.50% due 2/15/41 - 5/15/46; valued at $305)		299		299
				352
Total Securities held as Collateral on Loaned Securities (Cost $1,503)				1,503

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

	Shares		Value (000)
Investment Company (3.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $6,551)		6,551,024	$	6,551
Total Short-Term Investments (Cost $8,054)				8,054
Total Investments (100.5%) (Cost $156,206) Including $4,542 of Securities Loaned (g)(h)(i)				191,924
Liabilities in Excess of Other Assets (–0.5%)				(1,032	)
Net Assets (100.0%)			$	190,892

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

@  Value is less than $500.

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2019.

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

(d)  Security trades on the Hong Kong exchange.

(e)  Security has been deemed illiquid at June 30, 2019.

(f)  At June 30, 2019, the Fund held a fair valued security valued at less than $500, representing less than 0.05% 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 Company's (as defined herein) Directors.

(g)  Securities are available for collateral in connection with open foreign currency forward exchange contracts and futures contracts.

(h)  The approximate fair value and percentage of net assets, $145,717,000 and 76.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(i)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $44,180,000 and the aggregate gross unrealized depreciation is approximately $8,341,000, resulting in net unrealized appreciation of approximately $35,839,000.

ADR  American Depositary Receipt.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at June 30, 2019:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
BNP Paribas SA	$	1,874	INR	131,069	9/12/19	$	8
Citibank NA	EUR	1,593	$	1,816	9/12/19		(6	)
State Street Bank and Trust Co.	HKD	35,433	$	4,524	9/12/19		(14	)
State Street Bank and Trust Co.	$	2,418	GBP	1,894	9/12/19		(5	)
State Street Bank and Trust Co.	$	1,972	JPY	212,626	9/12/19		10
						$	(7	)

Futures Contracts:

The Fund had the following futures contracts open at June 30, 2019:

	Number of Contracts		Expiration Date	Notional Amount (000)			Value (000)		Unrealized Appreciation (000)
Long:
MSCI Emerging Market E Mini (United States)		60	Sep-19	$	3		$	3,160	$	120
SGX NIFTY 50 (Singapore)		83	Jul-19		—	@		1,965		8
									$	128

@  —  Value is less than $500.

BSRM  —  Berlin Second Regulated Market.

PAR  —  Paris Stock Exchange.

EUR  —  Euro

GBP  —  British Pound

HKD  —  Hong Kong Dollar

INR  —  Indian Rupee

JPY  —  Japanese Yen

USD  —  United States Dollar

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Active International Allocation Portfolio

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		75.6	%
Banks		11.5
Pharmaceuticals		7.9
Personal Products		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, 2019.

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

***  Does not include open long futures contracts with a value of approximately $5,125,000 and net unrealized appreciation of approximately $128,000. Does not include open foreign currency forward exchange contracts with net unrealized depreciation of approximately $7,000.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Active International Allocation Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $146,670)	$	182,764
Investments in Securities of Affiliated Issuers, at Value (Cost $9,536)		9,160
Total Investments in Securities, at Value (Cost $156,206)		191,924
Foreign Currency, at Value (Cost $442)		431
Cash from Securities Lending		9
Tax Reclaim Receivable		549
Receivable for Variation Margin on Futures Contracts		259
Dividends Receivable		178
Receivable for Fund Shares Sold		76
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		18
Receivable from Affiliate		14
Receivable from Securities Lending Income		8
Other Assets		71
Total Assets		193,537
Liabilities:
Collateral on Securities Loaned, at Value		1,512
Payable for Investments Purchased		386
Payable for Advisory Fees		284
Payable for Fund Shares Redeemed		198
Deferred Capital Gain Country Tax		72
Payable for Professional Fees		71
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		25
Payable for Sub Transfer Agency Fees — Class I		8
Payable for Sub Transfer Agency Fees — Class A		7
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Custodian Fees		14
Payable for Shareholder Services Fees — Class A		11
Payable for Distribution and Shareholder Services Fees — Class L		3
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		12
Payable for Transfer Agency Fees — Class I		2
Payable for Transfer Agency Fees — Class A		3
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		—	@
Other Liabilities		36
Total Liabilities		2,645
Net Assets	$	190,892
Net Assets Consist of:
Paid-in-Capital	$	165,062
Total Distributable Earnings		25,830
Net Assets	$	190,892

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Active International Allocation Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	133,502
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		9,636,076
Net Asset Value, Offering and Redemption Price Per Share	$	13.85
CLASS A:
Net Assets	$	52,794
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,728,047
Net Asset Value, Redemption Price Per Share	$	14.16
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.78
Maximum Offering Price Per Share	$	14.94
CLASS L:
Net Assets	$	4,559
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		323,587
Net Asset Value, Offering and Redemption Price Per Share	$	14.09
CLASS C:
Net Assets	$	37
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,603
Net Asset Value, Offering and Redemption Price Per Share	$	14.09
(1) Including: Securities on Loan, at Value:	$	4,542

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Active International Allocation Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $335 of Foreign Taxes Withheld)	$	2,635
Dividends from Securities of Affiliated Issuers (Note G)		123
Income from Securities Loaned — Net		17
Total Investment Income		2,775
Expenses:
Advisory Fees (Note B)		598
Shareholder Services Fees — Class A (Note D)		64
Distribution and Shareholder Services Fees — Class L (Note D)		17
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Administration Fees (Note C)		74
Professional Fees		55
Sub Transfer Agency Fees — Class I		26
Sub Transfer Agency Fees — Class A		20
Sub Transfer Agency Fees — Class L		2
Sub Transfer Agency Fees — Class C		—	@
Custodian Fees (Note F)		34
Shareholder Reporting Fees		29
Registration Fees		23
Pricing Fees		11
Transfer Agency Fees — Class I (Note E)		3
Transfer Agency Fees — Class A (Note E)		5
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Directors' Fees and Expenses		5
Other Expenses		11
Total Expenses		979
Reimbursement of Class Specific Expenses — Class I (Note B)		(29	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(15	)
Waiver of Advisory Fees (Note B)		(11	)
Net Expenses		922
Net Investment Income		1,853
Realized Gain (Loss):
Investments Sold (Net of $10 of Capital Gain Country Tax)		244
Foreign Currency Forward Exchange Contracts		356
Foreign Currency Translation		(18	)
Futures Contracts		346
Net Realized Gain		928
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $41)		22,707
Investments in Affiliates		(94	)
Foreign Currency Forward Exchange Contracts		(158	)
Foreign Currency Translation		4
Futures Contracts		96
Net Change in Unrealized Appreciation (Depreciation)		22,555
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		23,483
Net Increase in Net Assets Resulting from Operations	$	25,336

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Active International Allocation Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,853		$	3,250
Net Realized Gain		928			4,127
Net Change in Unrealized Appreciation (Depreciation)		22,555			(39,587	)
Net Increase (Decrease) in Net Assets Resulting from Operations		25,336			(32,210	)
Dividends and Distributions to Shareholders:
Class I		—			(2,041	)
Class A		—			(655	)
Class L		—			(29	)
Class C		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(2,725	)
Capital Share Transactions:(1)
Class I:
Subscribed		5,860			10,181
Distributions Reinvested		—			2,032
Redeemed		(9,941	)		(23,890	)
Class A:
Subscribed		1,925			9,153
Distributions Reinvested		—			646
Redeemed		(6,923	)		(14,703	)
Class L:
Exchanged		29			50
Distributions Reinvested		—			28
Redeemed		(451	)		(1,267	)
Class C:
Subscribed		1			27
Distributions Reinvested		—			—	@
Redeemed		(12	)		(—	@)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(9,512	)		(17,743	)
Redemption Fees		—	@		—	@
Total Increase (Decrease) in Net Assets		15,824			(52,678	)
Net Assets:
Beginning of Period		175,068			227,746
End of Period	$	190,892		$	175,068

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Active International Allocation Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		452			736
Shares Issued on Distributions Reinvested		—			164
Shares Redeemed		(754	)		(1,720	)
Net Decrease in Class I Shares Outstanding		(302	)		(820	)
Class A:
Shares Subscribed		143			668
Shares Issued on Distributions Reinvested		—			51
Shares Redeemed		(521	)		(1,056	)
Net Decrease in Class A Shares Outstanding		(378	)		(337	)
Class L:
Shares Exchanged		3			4
Shares Issued on Distributions Reinvested		—			2
Shares Redeemed		(34	)		(90	)
Net Decrease in Class L Shares Outstanding		(31	)		(84	)
Class C:
Shares Subscribed		—	@@		2
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(1	)		(—	@@)
Net Increase (Decrease) in Class C Shares Outstanding		(1	)		2

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Active International Allocation Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	12.07		$	14.46		$	11.83		$	12.20		$	12.52		$	13.75
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.14			0.23			0.19			0.26			0.22			0.34
Net Realized and Unrealized Gain (Loss)		1.64			(2.41	)		2.74			(0.34	)		(0.42	)		(1.22	)
Total from Investment Operations		1.78			(2.18	)		2.93			(0.08	)		(0.20	)		(0.88	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.21	)		(0.30	)		(0.29	)		(0.12	)		(0.35	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	13.85		$	12.07		$	14.46		$	11.83		$	12.20		$	12.52
Total Return(4)		14.75	%(6)		(15.14	)%		24.76	%		(0.67	)%		(1.63	)%		(6.37	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	133,502		$	119,925		$	155,550		$	169,589		$	197,733		$	219,467
Ratio of Expenses Before Expense Limitation		0.96	%(7)		0.97	%		1.14	%		0.94	%		0.92	%		0.99	%
Ratio of Expenses After Expense Limitation		0.88	%(5)(7)		0.88	%(5)		0.88	%(5)		0.76	%(5)		0.89	%(5)		0.88	%(5)
Ratio of Net Investment Income		2.14	%(5)(7)		1.67	%(5)		1.44	%(5)		2.18	%(5)		1.66	%(5)		2.53	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.01	%		0.01	%		0.02	%
Portfolio Turnover Rate		17	%(6)		43	%		22	%		40	%		30	%		32	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been 0.13% higher and the Ratio of Net Investment Income would have been 0.13% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Active International Allocation Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	12.36		$	14.79		$	12.10		$	12.47		$	12.79		$	14.03
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.12			0.19			0.14			0.21			0.17			0.30
Net Realized and Unrealized Gain (Loss)		1.68			(2.46	)		2.80			(0.34	)		(0.42	)		(1.24	)
Total from Investment Operations		1.80			(2.27	)		2.94			(0.13	)		(0.25	)		(0.94	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.16	)		(0.25	)		(0.24	)		(0.07	)		(0.30	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	14.16		$	12.36		$	14.79		$	12.10		$	12.47		$	12.79
Total Return(4)		14.56	%(6)		(15.38	)%		24.29	%		(1.05	)%		(1.95	)%		(6.70	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	52,794		$	50,726		$	65,710		$	56,934		$	64,482		$	71,938
Ratio of Expenses Before Expense Limitation		1.26	%(7)		1.26	%		1.48	%		1.32	%		1.28	%		1.31	%
Ratio of Expenses After Expense Limitation		1.23	%(5)(7)		1.19	%(5)		1.23	%(5)		1.14	%(5)		1.24	%(5)		1.23	%(5)
Ratio of Net Investment Income		1.76	%(5)(7)		1.37	%(5)		1.02	%(5)		1.79	%(5)		1.31	%(5)		2.18	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.01	%		0.01	%		0.02	%
Portfolio Turnover Rate		17	%(6)		43	%		22	%		40	%		30	%		32	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.10% higher and the Ratio of Net Investment Income would have been 0.10% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Active International Allocation Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	12.32		$	14.73		$	12.04		$	12.41		$	12.74		$	13.97
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.08			0.13			0.07			0.14			0.11			0.23
Net Realized and Unrealized Gain (Loss)		1.69			(2.46	)		2.79			(0.35	)		(0.42	)		(1.23	)
Total from Investment Operations		1.77			(2.33	)		2.86			(0.21	)		(0.31	)		(1.00	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.08	)		(0.17	)		(0.16	)		(0.02	)		(0.23	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	14.09		$	12.32		$	14.73		$	12.04		$	12.41		$	12.74
Total Return(4)		14.37	%(6)		(15.87	)%		23.80	%		(1.68	)%		(2.44	)%		(7.17	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,559		$	4,375		$	6,463		$	6,053		$	7,495		$	8,606
Ratio of Expenses Before Expense Limitation		1.80	%(7)		1.76	%		2.07	%		1.93	%		1.87	%		1.87	%
Ratio of Expenses After Expense Limitation		1.73	%(5)(7)		1.69	%(5)		1.73	%(5)		1.74	%(5)		1.74	%(5)		1.73	%(5)
Ratio of Net Investment Income		1.28	%(5)(7)		0.92	%(5)		0.54	%(5)		1.20	%(5)		0.82	%(5)		1.68	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.01	%		0.01	%		0.02	%
Portfolio Turnover Rate		17	%(6)		43	%		22	%		40	%		30	%		32	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Active International Allocation Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	12.34		$	14.77		$	12.15		$	12.38		$	13.94
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		0.06			0.09			(0.00	)(4)		0.14			(0.00	)(4)
Net Realized and Unrealized Gain (Loss)		1.69			(2.45	)		2.83			(0.37	)		(1.53	)
Total from Investment Operations		1.75			(2.36	)		2.83			(0.23	)		(1.53	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.07	)		(0.21	)		—			(0.03	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	14.09		$	12.34		$	14.77		$	12.15		$	12.38
Total Return(5)		14.18	%(7)		(16.04	)%		23.42	%		(1.94	)%		(10.96	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	37		$	42		$	23		$	9		$	32
Ratio of Expenses Before Expense Limitation		6.84	%(8)		7.18	%		20.06	%		8.58	%		4.26	%(8)
Ratio of Expenses After Expense Limitation		1.98	%(6)(8)		1.98	%(6)		1.97	%(6)		1.99	%(6)		1.99	%(6)(8)
Ratio of Net Investment Income (Loss)		0.89	%(6)(8)		0.67	%(6)		(0.03	)%(6)		1.19	%(6)		(0.04	)%(6)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(8)		0.02	%		0.03	%		0.01	%		0.01	%(8)
Portfolio Turnover Rate		17	%(7)		43	%		22	%		40	%		30	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Active International Allocation Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class L and Class C. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (5) when market quotations are

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	1	$	2,203	$	—	$	2,204
Airlines		1,970		—		—		1,970
Auto Components		—		309		—		309
Automobiles		—		5,432		—		5,432
Banks		9,920		11,928		—		21,848
Beverages		420		6,009		—		6,429
Biotechnology		212		—		—		212
Building Products		—		1,341		—		1,341
Capital Markets		—		1,045		—		1,045
Chemicals		—		4,002		—		4,002
Commercial Services & Supplies		—		701		—		701
Communications Equipment		—		2,269		—		2,269
Construction & Engineering		—		1,255		—		1,255
Construction Materials		—		1,570		—		1,570
Diversified Financial Services		—		379		—		379
Diversified Telecommunication Services		—		1,172		—		1,172
Electric Utilities		—		754		—		754
Electrical Equipment		—		1,219		—		1,219
Electronic Equipment, Instruments & Components		379		2,950		—		3,329
Energy Equipment & Services		2,404		927		—		3,331
Entertainment		—		1,388		—		1,388
Equity Real Estate Investment Trusts (REITs)		491		—		—		491
Food & Staples Retailing		147		2,804		—		2,951
Food Products		—		9,036		—		9,036
Health Care Equipment & Supplies		1,454		4,201		—		5,655
Health Care Providers & Services		—		899		—		899
Household Durables		—		1,925		—		1,925
Household Products		—		3,007		—		3,007
Independent Power & Renewable Electricity Producers		—		213		—		213
Information Technology Services		2,391		3,338		—		5,729
Insurance		—		8,159		—		8,159
Interactive Media & Services		1,878		4,696		—		6,574
Internet & Direct Marketing Retail		4,044		—		—		4,044
Leisure Products		—		646		—		646

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	$	1,483	$	978		$	—		$	2,461
Machinery		—		4,551			—			4,551
Metals & Mining		3,900		329			—			4,229
Multi-Line Retail		240		—			—			240
Multi-Utilities		—		135			—			135
Oil, Gas & Consumable Fuels		666		4,627			—			5,293
Personal Products		412		9,187			—			9,599
Pharmaceuticals		1,444		13,577			—			15,021
Professional Services		—		4,815			—			4,815
Real Estate Management & Development		—		551			—	@		551
Road & Rail		—		936			—			936
Semiconductors & Semiconductor Equipment		—		4,709			—			4,709
Software		1,703		5,747			—			7,450
Specialty Retail		—		804			—			804
Tech Hardware, Storage & Peripherals		—		2,359			—			2,359
Textiles, Apparel & Luxury Goods		—		4,242			—			4,242
Tobacco		—		1,372			—			1,372
Trading Companies & Distributors		—		642			—			642
Transportation Infrastructure		—		891			—			891
Wireless Telecommunication Services		—		838			—			838
Total Common Stocks		35,559		147,067			—	@		182,626
Rights		—		7			—			7
Investment Company		1,237		—			—			1,237
Short-Term Investments
Investment Company		7,702		—			—			7,702
Repurchase Agreements		—		352			—			352
Total Short-Term Investments		7,702		352			—			8,054
Foreign Currency Forward Exchange Contracts		—		18			—			18
Futures Contracts		128		—			—			128
Total Assets		44,626		147,444			—	@		192,070
Liabilities:
Foreign Currency Forward Exchange Contracts		—		(25	)		—			(25	)
Total	$	44,626	$	147,419		$	—	@	$	192,045

@  Value is less than $500.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (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		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		—	@
Realized gains (losses)		—
Ending Balance	$	—	@
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2019	$	—	@

@  Value is less than $500.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are

maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

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 Fund'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 Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund 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 may 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 Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund 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 Fund as unrealized gain or loss. The Fund 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" ("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 Fund uses derivative instruments, how these derivative

instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	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	$	18
Futures Contracts	Variation Margin on Futures Contracts	Equity Risk		128	(a)
Total			$	146
	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	$	(25	)

(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 Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	356
Equity Risk	Futures Contracts		346
	Total	$	702
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(158	)
Equity Risk	Futures Contracts		96
	Total	$	(62	)

At June 30, 2019, the Fund'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	$	18	$	(25	)

(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.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Fund 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 Fund 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 potential 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 Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
BNP Paribas SA	$	8	$	—		$	—	$	8
State Street Bank and Trust Co.		10		(10	)		—		0
Total	$	18	$	(10	)	$	—	$	8

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)			Collateral Pledged (000)		Net Amount (not less than $0) (000)
Citibank NA	$	6	$	—		$	—	$	6
State Street Bank and Trust Co.		19		(10	)		—		9
Total	$	25	$	(10	)	$	—	$	15

For the six months ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	18,108,000
Futures Contracts:
Average monthly notional value	$	13,574,000

6.  Securities Lending: The Fund 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 Fund. The Fund 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 Fund'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 Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	4,542	(d)	$	—	$	(4,542	)(e)(f)	$	0

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

(e) The Fund received cash collateral of approximately $1,512,000, of which approximately $1,503,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2019, there was uninvested cash of approximately $9,000, which is not reflected in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $3,208,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

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

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2019:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	1,512	$	—	$	—	$	—	$	1,512
Total Borrowings	$	1,512	$	—	$	—	$	—	$	1,512
Gross amount of recognized liabilities for securities lending transactions									$	1,512

7.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares and Class C shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to

protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

9.  Dividends and Distributions to Shareholders: Dividends 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.

10.  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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $1 billion			Over $1 billion
	0.65	%		0.60	%

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.62% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% for Class I shares, 1.25% for Class A shares, 1.75% for Class L shares and 2.00% for Class C shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $11,000 of advisory fees were waived and approximately $31,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of

0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $29,402,000 and $28,649,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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, both directly and as a portion of the securities held as collateral on loaned

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $10,000 relating to the Fund's investment in the Liquidity Funds.

The Fund invests in Morgan Stanley China A Share Fund, Inc., a closed-end management investment company advised by an affiliate of the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Morgan Stanley China A Share Fund, Inc.. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $5,000 relating to the Fund's investment in the Morgan Stanley China A Share Fund, Inc.

The Fund had transactions with Morgan Stanley China A Shares Fund, Inc. Mitsubishi UFJ Financial Group, Inc. and its affiliated broker-dealers, which may be deemed affiliates of the Adviser/Administrator and Distributor under Section 17 the Act.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	9,271	$	22,933	$	24,502	$	118
Morgan Stanley China A Share Fund, Inc.		—		1,324		—		—
Mitsubishi UFJ Financial Group, Inc.		228		—		—		5
	$	9,499	$	24,257	$	24,502	$	123

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)			Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—		$	7,702
Morgan Stanley China A Share Fund, Inc.		—		(87	)		1,237
Mitsubishi UFJ Financial Group, Inc.		—		(7	)		221
	$	—	$	(94	)	$	9,160

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with

Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	2,725	$	—	$	4,318	$	—

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

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2018.

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	19	$	—

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $3,828,000 and $7,712,000, respectively that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund 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, 2018, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $2,197,000.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount

increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 82.7%.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the three- and five-year periods but better than 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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

29

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

30

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

31

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

32

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

33

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIAIASAN
2663699 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Advantage Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	16
Investment Advisory Agreement Approval	25
Privacy Notice	27
Director and Officer Information	29

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Advantage Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Advantage Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Advantage Portfolio Class I	$	1,000.00	$	1,266.00	$	1,020.63	$	4.72	$	4.21		0.84	%
Advantage Portfolio Class A		1,000.00		1,264.40		1,019.04		6.51		5.81		1.16
Advantage Portfolio Class L		1,000.00		1,265.30		1,019.98		5.45		4.86		0.97
Advantage Portfolio Class C		1,000.00		1,259.70		1,015.42		10.59		9.44		1.89
Advantage Portfolio Class IS		1,000.00		1,266.40		1,020.83		4.50		4.01		0.80

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Advantage Portfolio

	Shares		Value (000)
Common Stocks (92.8%)
Aerospace & Defense (1.4%)
HEICO Corp., Class A		56,378	$	5,828
Capital Markets (2.9%)
MSCI, Inc.		24,563		5,866
S&P Global, Inc.		25,411		5,788
				11,654
Chemicals (4.9%)
Ecolab, Inc.		99,835		19,711
Commercial Services & Supplies (6.4%)
Copart, Inc. (a)		132,824		9,927
Rollins, Inc.		273,162		9,799
Waste Connections, Inc.		61,710		5,898
				25,624
Containers & Packaging (1.5%)
Ball Corp.		85,590		5,990
Diversified Consumer Services (1.6%)
ServiceMaster Global Holdings, Inc. (a)		120,569		6,280
Entertainment (8.1%)
Spotify Technology SA (a)		92,451		13,518
Walt Disney Co. (The)		136,011		18,993
				32,511
Health Care Equipment & Supplies (6.2%)
Danaher Corp.		42,330		6,050
Intuitive Surgical, Inc. (a)		35,992		18,879
				24,929
Hotels, Restaurants & Leisure (1.5%)
Starbucks Corp.		72,536		6,081
Information Technology Services (4.8%)
Broadridge Financial Solutions, Inc.		75,901		9,691
Gartner, Inc. (a)		59,901		9,641
				19,332
Interactive Media & Services (7.7%)
Alphabet, Inc., Class C (a)		7,886		8,524
Facebook, Inc., Class A (a)		29,002		5,598
Twitter, Inc. (a)		477,539		16,666
				30,788
Internet & Direct Marketing Retail (9.1%)
Amazon.com, Inc. (a)		14,574		27,598
MercadoLibre, Inc. (a)		14,383		8,799
				36,397
Machinery (1.5%)
Fortive Corp.		72,887		5,942
Personal Products (2.5%)
Estee Lauder Cos., Inc. (The), Class A		53,995		9,887
Pharmaceuticals (5.1%)
Elanco Animal Health, Inc. (a)		289,344		9,780
Zoetis, Inc.		92,238		10,468
				20,248

	Shares		Value (000)
Professional Services (1.5%)
Verisk Analytics, Inc.		40,704	$	5,962
Road & Rail (2.2%)
Union Pacific Corp.		52,193		8,826
Software (20.5%)
Adobe, Inc. (a)		46,559		13,719
Autodesk, Inc. (a)		34,483		5,617
Constellation Software, Inc. (Canada)		14,988		14,126
Intuit, Inc.		20,868		5,453
salesforce.com, Inc. (a)		62,445		9,475
ServiceNow, Inc. (a)		61,696		16,940
Workday, Inc., Class A (a)		81,491		16,753
				82,083
Textiles, Apparel & Luxury Goods (3.4%)
LVMH Moet Hennessy Louis Vuitton SE (France)		32,123		13,674
Total Common Stocks (Cost $284,352)				371,747
Short-Term Investment (6.7%)
Investment Company (6.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $26,787)		26,787,405		26,787
Total Investments Excluding Purchased Options (99.5%) (Cost $311,139)				398,534
Total Purchased Options Outstanding (0.1%) (Cost $1,156)				390
Total Investments (99.6%) (Cost $312,295) (b)(c)				398,924
Other Assets in Excess of Liabilities (0.4%)				1,523
Net Assets (100.0%)			$	400,447

(a)  Non-income producing security.

(b)  The approximate fair value and percentage of net assets, $13,674,000 and 3.4%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $87,720,000 and the aggregate gross unrealized depreciation is approximately $1,091,000, resulting in net unrealized appreciation of approximately $86,629,000.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Advantage Portfolio

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2019:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.58	Jan-20		54,647,487		54,647	$	126		$	280	$	(154	)
Royal Bank of Scotland	USD/CNH	CNH	7.78	Jul-19		48,816,064		48,816		—	@		238		(238	)
Royal Bank of Scotland	USD/CNH	CNH	7.85	Jun-20		73,805,968		73,806		241			381		(140	)
Royal Bank of Scotland	USD/CNH	CNH	8.00	Oct-19		43,802,720		43,803		23			257		(234	)
									$	390		$	1,156	$	(766	)

@  Value is less than $500.

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		25.0	%
Software		20.6
Internet & Direct Marketing Retail		9.1
Entertainment		8.2
Interactive Media & Services		7.7
Short-Term Investment		6.7
Commercial Services & Supplies		6.4
Health Care Equipment & Supplies		6.3
Pharmaceuticals		5.1
Chemicals		4.9
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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Advantage Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $285,508)	$	372,137
Investment in Security of Affiliated Issuer, at Value (Cost $26,787)		26,787
Total Investments in Securities, at Value (Cost $312,295)		398,924
Foreign Currency, at Value (Cost $1)		1
Receivable for Fund Shares Sold		3,629
Receivable for Investments Sold		1,571
Dividends Receivable		109
Receivable from Affiliate		35
Tax Reclaim Receivable		22
Other Assets		122
Total Assets		404,413
Liabilities:
Payable for Investments Purchased		2,461
Due to Broker		590
Payable for Advisory Fees		530
Payable for Fund Shares Redeemed		227
Payable for Professional Fees		56
Payable for Shareholder Services Fees — Class A		13
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		34
Payable for Administration Fees		25
Payable for Transfer Agency Fees — Class I		5
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		2
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Sub Transfer Agency Fees — Class I		9
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Custodian Fees		1
Other Liabilities		10
Total Liabilities		3,966
Net Assets	$	400,447
Net Assets Consist of:
Paid-in-Capital	$	311,783
Total Distributable Earnings		88,664
Net Assets	$	400,447

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Advantage Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	252,122
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		9,490,705
Net Asset Value, Offering and Redemption Price Per Share	$	26.57
CLASS A:
Net Assets	$	67,694
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,606,575
Net Asset Value, Redemption Price Per Share	$	25.97
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.44
Maximum Offering Price Per Share	$	27.41
CLASS L:
Net Assets	$	4,487
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		169,516
Net Asset Value, Offering and Redemption Price Per Share	$	26.47
CLASS C:
Net Assets	$	42,802
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,690,380
Net Asset Value, Offering and Redemption Price Per Share	$	25.32
CLASS IS:
Net Assets	$	33,342
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,252,351
Net Asset Value, Offering and Redemption Price Per Share	$	26.62

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Advantage Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $75 of Foreign Taxes Withheld)	$	966
Dividends from Security of Affiliated Issuer (Note G)		187
Income from Securities Loaned — Net		180
Total Investment Income		1,333
Expenses:
Advisory Fees (Note B)		1,073
Shareholder Services Fees — Class A (Note D)		66
Distribution and Shareholder Services Fees — Class L (Note D)		16
Distribution and Shareholder Services Fees — Class C (Note D)		188
Administration Fees (Note C)		132
Sub Transfer Agency Fees — Class I		82
Sub Transfer Agency Fees — Class A		27
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		13
Professional Fees		53
Registration Fees		46
Transfer Agency Fees — Class I (Note E)		4
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		4
Transfer Agency Fees — Class IS (Note E)		1
Custodian Fees (Note F)		12
Shareholder Reporting Fees		12
Directors' Fees and Expenses		6
Pricing Fees		1
Reorganization Expense		20
Other Expenses		11
Expenses Before Non Operating Expenses		1,773
Bank Overdraft Expense		1
Total Expenses		1,774
Reimbursement of Class Specific Expenses — Class I (Note B)		(45	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Waiver of Advisory Fees (Note B)		(30	)
Rebate from Morgan Stanley Affiliate (Note G)		(16	)
Distribution Fees — Class L Shares Waived (Note D)		(15	)
Net Expenses		1,667
Net Investment Loss		(334	)
Realized Gain (Loss):
Investments Sold		5,237
Foreign Currency Translation		(8	)
Net Realized Gain		5,229
Change in Unrealized Appreciation (Depreciation):
Investments		69,332
Foreign Currency Translation		(1	)
Net Change in Unrealized Appreciation (Depreciation)		69,331
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		74,560
Net Increase in Net Assets Resulting from Operations	$	74,226

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Advantage Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(334	)	$	(339	)
Net Realized Gain		5,229			4,790
Net Change in Unrealized Appreciation (Depreciation)		69,331			(8,649	)
Net Increase (Decrease) in Net Assets Resulting from Operations		74,226			(4,198	)
Dividends and Distributions to Shareholders:
Class I		—			(4,501	)
Class A		—			(1,722	)
Class L		—			(233	)
Class C		—			(1,230	)
Class IS		—			(1,253	)
Total Dividends and Distributions to Shareholders		—			(8,939	)
Capital Share Transactions:(1)
Class I:
Subscribed		96,958			71,760
Issued due to a Tax-free Reorganization		—			74,516
Distributions Reinvested		—			4,501
Redeemed		(47,550	)		(40,550	)
Class A:
Subscribed		23,791			22,223
Issued due to a Tax-free Reorganization		—			12,842
Distributions Reinvested		—			1,722
Redeemed		(10,830	)		(15,270	)
Class L:
Issued due to a Tax-free Reorganization		—			107
Distributions Reinvested		—			233
Redeemed		(243	)		(618	)
Class C:
Subscribed		6,627			17,251
Issued due to a Tax-free Reorganization		—			9,885
Distributions Reinvested		—			1,228
Redeemed		(5,011	)		(5,204	)
Class IS:
Subscribed		570			10,421
Distributions Reinvested		—			1,252
Redeemed		(890	)		(1,534	)
Net Increase in Net Assets Resulting from Capital Share Transactions		63,422			164,765
Total Increase in Net Assets		137,648			151,628
Net Assets:
Beginning of Period		262,799			111,171
End of Period	$	400,447		$	262,799

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Advantage Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		3,953			3,152
Shares Issued due to a Tax-free Reorganization		—			3,393
Shares Issued on Distributions Reinvested		—			203
Shares Redeemed		(1,935	)		(1,792	)
Net Increase in Class I Shares Outstanding		2,018			4,956
Class A:
Shares Subscribed		977			991
Shares Issued due to a Tax-free Reorganization		—			597
Shares Issued on Distributions Reinvested		—			79
Shares Redeemed		(462	)		(700	)
Net Increase in Class A Shares Outstanding		515			967
Class L:
Shares Issued due to a Tax-free Reorganization		—			5
Shares Issued on Distributions Reinvested		—			10
Shares Redeemed		(10	)		(26	)
Net Decrease in Class L Shares Outstanding		(10	)		(11	)
Class C:
Shares Subscribed		280			771
Shares Issued due to a Tax-free Reorganization		—			469
Shares Issued on Distributions Reinvested		—			58
Shares Redeemed		(217	)		(239	)
Net Increase in Class C Shares Outstanding		63			1,059
Class IS:
Shares Subscribed		23			461
Shares Issued on Distributions Reinvested		—			56
Shares Redeemed		(36	)		(68	)
Net Increase (Decrease) in Class IS Shares Outstanding		(13	)		449

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Advantage Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	20.98		$	21.45		$	17.47		$	17.40		$	16.83		$	16.41
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.00	)(3)		(0.01	)		0.00	(3)		0.07			0.01			0.04
Net Realized and Unrealized Gain		5.59			0.87			5.57			0.42			2.11			1.15
Total from Investment Operations		5.59			0.86			5.57			0.49			2.12			1.19
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.04	)		(0.02	)		(0.01	)
Net Realized Gain		—			(1.33	)		(1.59	)		(0.38	)		(1.53	)		(0.76	)
Total Distributions		—			(1.33	)		(1.59	)		(0.42	)		(1.55	)		(0.77	)
Net Asset Value, End of Period	$	26.57		$	20.98		$	21.45		$	17.47		$	17.40		$	16.83
Total Return(4)		26.60	%(8)		3.74	%		32.06	%		2.82	%		12.56	%		7.43	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	252,122		$	156,782		$	54,002		$	42,695		$	24,718		$	17,971
Ratio of Expenses Before Expense Limitation		0.91	%(9)		1.01	%		1.09	%		1.15	%		1.49	%		1.78	%
Ratio of Expenses After Expense Limitation		0.84	%(5)(9)		0.84	%(5)		0.84	%(5)		0.84	%(5)		0.86	%(5)(6)		1.04	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.84	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.02	)%(5)(9)		(0.02	)%(5)		0.02	%(5)		0.38	%(5)		0.06	%(5)		0.23	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.00	%(7)		0.01	%
Portfolio Turnover Rate		45	%(8)		79	%		65	%		79	%		51	%		31	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.85% for Class I shares. Prior to January 23, 2015, the maximum ratio was 1.05% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Advantage Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	20.54		$	21.10		$	17.26		$	17.22		$	16.70		$	16.34
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.04	)		(0.08	)		(0.06	)		0.01			(0.06	)		(0.03	)
Net Realized and Unrealized Gain		5.47			0.85			5.49			0.41			2.11			1.15
Total from Investment Operations		5.43			0.77			5.43			0.42			2.05			1.12
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.33	)		(1.59	)		(0.38	)		(1.53	)		(0.76	)
Net Asset Value, End of Period	$	25.97		$	20.54		$	21.10		$	17.26		$	17.22		$	16.70
Total Return(3)		26.44	%(6)		3.37	%		31.64	%		2.47	%		12.20	%		7.05	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	67,694		$	42,959		$	23,715		$	19,850		$	11,939		$	3,738
Ratio of Expenses Before Expense Limitation		1.19	%(7)		1.29	%		1.39	%		1.43	%		1.87	%		2.14	%
Ratio of Expenses After Expense Limitation		1.16	%(4)(7)		1.17	%(4)		1.19	%(4)		1.19	%(4)		1.18	%(4)(5)		1.39	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.16	%(4)(7)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.36	)%(4)(7)		(0.37	)%(4)		(0.32	)%(4)		0.04	%(4)		(0.31	)%(4)		(0.15	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		45	%(6)		79	%		65	%		79	%		51	%		31	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(5)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.20% for Class A shares. Prior to January 23, 2015, the maximum ratio was 1.40% for Class A shares.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Advantage Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	20.92		$	21.42		$	17.46		$	17.40		$	16.82		$	16.42
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.02	)		(0.05	)		(0.02	)		0.04			(0.01	)		0.02
Net Realized and Unrealized Gain		5.57			0.88			5.57			0.43			2.12			1.14
Total from Investment Operations		5.55			0.83			5.55			0.47			2.11			1.16
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.03	)		—			(0.00	)(3)
Net Realized Gain		—			(1.33	)		(1.59	)		(0.38	)		(1.53	)		(0.76	)
Total Distributions		—			(1.33	)		(1.59	)		(0.41	)		(1.53	)		(0.76	)
Net Asset Value, End of Period	$	26.47		$	20.92		$	21.42		$	17.46		$	17.40		$	16.82
Total Return(4)		26.53	%(7)		3.61	%		31.96	%		2.72	%		12.47	%		7.28	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,487		$	3,751		$	4,077		$	3,684		$	5,369		$	6,549
Ratio of Expenses Before Expense Limitation		1.70	%(8)		1.82	%		1.87	%		1.85	%		2.33	%		2.64	%
Ratio of Expenses After Expense Limitation		0.97	%(5)(8)		0.98	%(5)		0.96	%(5)		0.91	%(5)		0.97	%(5)(6)		1.18	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.97	%(5)(8)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.15	)%(5)(8)		(0.21	)%(5)		(0.10	)%(5)		0.26	%(5)		(0.03	)%(5)		0.12	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		45	%(7)		79	%		65	%		79	%		51	%		31	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.99% for Class L shares. Prior to January 23, 2015, the maximum ratio was 1.19% for Class L shares.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Advantage Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	20.10		$	20.82		$	17.16		$	17.25		$	18.08
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.13	)		(0.24	)		(0.20	)		(0.12	)		(0.14	)
Net Realized and Unrealized Gain		5.35			0.85			5.45			0.41			0.86
Total from Investment Operations		5.22			0.61			5.25			0.29			0.72
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.02	)
Net Realized Gain		—			(1.33	)		(1.59	)		(0.38	)		(1.53	)
Total Distributions		—			(1.33	)		(1.59	)		(0.38	)		(1.55	)
Net Asset Value, End of Period	$	25.32		$	20.10		$	20.82		$	17.16		$	17.25
Total Return(4)		25.97	%(6)		2.64	%		30.77	%		1.71	%		3.91	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	42,802		$	32,706		$	11,835		$	6,376		$	1,776
Ratio of Expenses Before Expense Limitation		1.92	%(7)		2.00	%		2.10	%		2.20	%		2.83	%(7)
Ratio of Expenses After Expense Limitation		1.89	%(5)(7)		1.88	%(5)		1.90	%(5)		1.94	%(5)		1.94	%(5)(7)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.89	%(5)(7)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.07	)%(5)(7)		(1.08	)%(5)		(1.01	)%(5)		(0.72	)%(5)		(1.15	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%		0.01	%		0.01	%		0.01	%(7)
Portfolio Turnover Rate		45	%(6)		79	%		65	%		79	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Advantage Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	21.02		$	21.49		$	17.48		$	17.42		$	16.84		$	16.41
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.00	(3)		(0.01	)		0.01			0.08			0.02			0.04
Net Realized and Unrealized Gain		5.60			0.87			5.59			0.41			2.11			1.16
Total from Investment Operations		5.60			0.86			5.60			0.49			2.13			1.20
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.05	)		(0.02	)		(0.01	)
Net Realized Gain		—			(1.33	)		(1.59	)		(0.38	)		(1.53	)		(0.76	)
Total Distributions		—			(1.33	)		(1.59	)		(0.43	)		(1.55	)		(0.77	)
Net Asset Value, End of Period	$	26.62		$	21.02		$	21.49		$	17.48		$	17.42		$	16.84
Total Return(4)		26.64	%(8)		3.74	%		32.22	%		2.79	%		12.65	%		7.50	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	33,342		$	26,601		$	17,542		$	13,273		$	12		$	12
Ratio of Expenses Before Expense Limitation		0.83	%(9)		0.93	%		1.01	%		1.05	%		14.53	%		18.84	%
Ratio of Expenses After Expense Limitation		0.80	%(5)(9)		0.80	%(5)		0.80	%(5)		0.80	%(5)		0.82	%(5)(6)		1.00	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.80	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		0.01	%(5)(9)		(0.04	)%(5)		0.07	%(5)		0.46	%(5)		0.10	%(5)		0.26	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.00	%(7)		0.01	%
Portfolio Turnover Rate		45	%(8)		79	%		65	%		79	%		51	%		31	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.81% for Class IS shares. Prior to January 23, 2015, the maximum ratio was 1.01% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Advantage Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

On November 16, 2018, the Fund acquired the net assets of the Company's Insight Portfolio ("Insight"), an open-end investment company, based on the respective valuations as of the close of business on November 16, 2018, pursuant to a Plan of Reorganization approved by the shareholders of Insight on October 17, 2018 ("Reorganization"). The purpose of the transaction was to combine two 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 3,393,240 Class I shares of the Fund at a net asset value ("NAV") of $21.96 for 4,949,201 Class I shares of Insight; 597,044 Class A shares of the Fund at a NAV of $21.51 for 860,147 Class A shares of Insight; 4,867 Class L shares of the Fund at a NAV of $21.90 for 7,388 Class L shares of Insight; 469,147 Class C shares of the Fund at a NAV of $21.07 for 691,884 Class C shares of Insight. The net assets of Insight before the Reorganization were approximately $97,349,000, including unrealized appreciation (depreciation) of approximately $(29,000) at November 16, 2018. The investment portfolio of Insight, with a fair value of approximately $97,367,000 and identified cost of approximately $97,396,000, on November 16, 2018, was the principal asset acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Insight was carried forward to align ongoing reporting of the Fund'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 Fund were approximately $160,556,000. Immediately after the

Reorganization, the net assets of the Fund were approximately $257,906,000.

Upon closing of the Reorganization, shareholders of Insight received shares of the Fund as follows:

Insight Portfolio	Advantage Portfolio
Class I	Class I
Class A	Class A
Class L	Class L
Class C	Class C

Assuming the acquisition had been completed on January 1, 2018, the beginning of the annual reporting period of the Fund, the Fund's pro-forma results of operations for the year ended December 31, 2018, are approximately as follows:

Net investment income(1)	$	1,964,000
Net realized gain and unrealized gain(2)	$	861,000
Net increase in net assets resulting from operations	$	2,825,000

(1) Approximately $(339,000) as reported, plus approximately $1,183,000 Insight prior to the Reorganization, plus approximately $1,120,000 of estimated pro-forma eliminated expenses.

(2) Approximately $(3,859,000) as reported, plus approximately $4,720,000 Insight prior to the Reorganization.

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 Insight that have been included in the Fund's Statement of Operations since November 16, 2018.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (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 its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other

things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (5) 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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the NAV as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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 Fund's investments as of June 30, 2019:

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	$	5,828	$	—	$	—	$	5,828
Capital Markets		11,654		—		—		11,654
Chemicals		19,711		—		—		19,711
Commercial Services & Supplies		25,624		—		—		25,624
Containers & Packaging		5,990		—		—		5,990
Diversified Consumer Services		6,280		—		—		6,280
Entertainment		32,511		—		—		32,511
Health Care Equipment & Supplies		24,929		—		—		24,929
Hotels, Restaurants & Leisure		6,081		—		—		6,081
Information Technology Services		19,332		—		—		19,332
Interactive Media & Services		30,788		—		—		30,788
Internet & Direct Marketing Retail		36,397		—		—		36,397
Machinery		5,942		—		—		5,942
Personal Products		9,887		—		—		9,887
Pharmaceuticals		20,248		—		—		20,248
Professional Services		5,962		—		—		5,962
Road & Rail		8,826		—		—		8,826
Software		82,083		—		—		82,083
Textiles, Apparel & Luxury Goods		—		13,674		—		13,674
Total Common Stocks		358,073		13,674		—		371,747
Call Options Purchased		—		390		—		390
Short-Term Investment
Investment Company		26,787		—		—		26,787
Total Assets	$	384,860	$	14,064	$	—	$	398,924

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund 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 Fund'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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund 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 in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received

by the Fund. When options are purchased OTC, the Fund 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 Fund 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" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	390	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(115	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(292	)(c)

(c) Amounts are included in Investments in the Statement of Operations.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	390	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) 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 Fund 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 Fund 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 potential 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 Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	126		$	—	$	(126	)	$	0
Royal Bank of Scotland		264			—		(264	)		0
Total	$	390	(a)	$	—	$	(390	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) 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, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	159,567,000

5.  Securities Lending: The Fund 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 Fund. The Fund 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 Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

At June 30, 2019, the Fund did not have any outstanding securities on loan.

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

7.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid

quarterly, at the annual rate based on the daily net assets as follows:

First $750 million			Next $750 million			Over $1.5 billion
	0.65	%		0.60	%		0.55	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.62% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.85% for Class I shares, 1.20% for Class A shares, 0.99% for Class L shares, 1.95% for Class C shares and 0.81% for Class IS 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, 2019, approximately $30,000 of advisory fees were waived and approximately $46,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares. The Distributor has agreed to waive for at least two years from the date of the Reorganization, the 12b-1 fees on Class L shares of the Fund to the extent it exceeds 0.04% of the average daily net assets of such shares on an annualized basis. For the six months ended June 30, 2019, this waiver amounted to approximately $15,000.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $191,156,000 and

$143,669,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $16,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	18,432	$	104,638	$	96,283	$	187

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	26,787

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	542	$	8,397	$	761	$	7,033

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 equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(597	)	$	597

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	—	$	532

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 18.8%.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund'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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

26

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

27

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

29

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIADVSAN
2663712 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Asia Opportunity Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	10
Notes to Financial Statements	14
Investment Advisory Agreement Approval	23
Privacy Notice	25
Director and Officer Information	27

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Asia Opportunity Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Asia Opportunity Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Asia Opportunity Portfolio Class I	$	1,000.00	$	1,292.50	$	1,019.44	$	6.14	$	5.41		1.08	%
Asia Opportunity Portfolio Class A		1,000.00		1,289.90		1,017.70		8.12		7.15		1.43
Asia Opportunity Portfolio Class C		1,000.00		1,285.70		1,014.23		12.07		10.64		2.13
Asia Opportunity Portfolio Class IS		1,000.00		1,293.00		1,019.69		5.86		5.16		1.03

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Asia Opportunity Portfolio

	Shares		Value (000)
Common Stocks (91.6%)
China (56.2%)
Alibaba Group Holding Ltd. ADR (a)		14,632	$	2,479
China Resources Beer Holdings Co., Ltd. (b)		666,300		3,154
Ctrip.com International Ltd. ADR (a)		61,584		2,273
Foshan Haitian Flavouring & Food Co., Ltd., Class A		217,428		3,323
Hangzhou Tigermed Consulting Co. Ltd., Class A		188,597		2,120
Huazhu Group Ltd. ADR (c)		77,472		2,808
HUYA, Inc. ADR (a)		109,598		2,708
Inner Mongolia Yili Industrial Group Co., Ltd., Class A		271,699		1,324
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd., Class A		165,472		2,932
Kweichow Moutai Co., Ltd., Class A		18,696		2,682
Meituan Dianping, Class B (a)(b)		389,100		3,414
Shenzhou International Group Holdings Ltd. (b)		212,700		2,914
TAL Education Group ADR (a)		115,003		4,382
Tencent Holdings Ltd. (b)		55,000		2,488
Tencent Music Entertainment Group ADR (a)(c)		9		—	@
				39,001
Hong Kong (12.4%)
AIA Group Ltd.		292,500		3,162
China East Education Holdings Ltd.		653,500		930
Haidilao International Holding Ltd. (d)		439,000		1,837
Hong Kong Exchanges & Clearing Ltd.		75,000		2,651
				8,580
India (8.8%)
HDFC Bank Ltd. ADR		47,123		6,128
Korea, Republic of (3.1%)
NAVER Corp.		21,492		2,122
Philippines (1.3%)
Jollibee Foods Corp.		166,140		914
Taiwan (9.8%)
Nien Made Enterprise Co., Ltd.		304,000		2,290
Silergy Corp.		87,000		1,707
Taiwan Semiconductor Manufacturing Co., Ltd.		370,000		2,823
				6,820
Total Common Stocks (Cost $51,979)				63,565
Short-Term Investments (8.7%)
Securities held as Collateral on Loaned Securities (0.0%)
Investment Company (0.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		106		—	@

	Face Amount (000)			Value (000)
Repurchase Agreements (0.0%)
Barclays Capital, Inc., (2.50%, dated 6/28/19, due 7/1/19; proceeds $—@; fully collateralized by a U.S. Government obligation; 3.63% due 2/15/44; valued at $—@)	$	—	@@	$	—	@
Merrill Lynch & Co., Inc., (2.48%, dated 6/28/19, due 7/1/19; proceeds $—@; fully collateralized by U.S. Government obligations; 2.13% - 2.50% due 2/15/41 - 5/15/46; valued at $—@)		—	@@		—	@
					—	@
Total Securities held as Collateral on Loaned Securities (Cost $—@)					—	@
	Shares
Investment Company (8.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $6,052)		6,052,096			6,052
Total Short-Term Investments (Cost $6,052)					6,052
Total Investments Excluding Purchased Options (100.3%) (Cost $58,031)					69,617
Total Purchased Options Outstanding (0.1%) (Cost $184)					60
Total Investments (100.4%) (Cost $58,215) Including $2,011 of Securities Loaned (e)(f)					69,677
Liabilities in Excess of Other Assets (–0.4%)					(272	)
Net Assets (100.0%)				$	69,405

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  All or a portion of this security was on loan at June 30, 2019.

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

(e)  The approximate fair value and percentage of net assets, $41,857,000 and 60.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $12,705,000 and the aggregate gross unrealized depreciation is approximately $1,243,000, resulting in net unrealized appreciation of approximately $11,462,000.

@  Value is less than $500.

@@  Amount is less than 500 shares.

ADR  American Depositary Receipt.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Asia Opportunity Portfolio

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2019:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.58	Jan-20		7,220,087		7,220	$	17		$	37	$	(20	)
Royal Bank of Scotland	USD/CNH	CNH	7.78	Jul-19		9,522,180		9,522		—	@		46		(46	)
Royal Bank of Scotland	USD/CNH	CNH	8.00	Oct-19		6,421,881		6,422		3			38		(35	)
Royal Bank of Scotland	USD/CNH	CNH	7.85	Jun-20		12,095,307		12,095		40			63		(23	)
									$	60		$	184	$	(124	)

@  —  Value is less than $500.

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		22.8	%
Beverages		12.6
Internet & Direct Marketing Retail		11.7
Banks		8.8
Short-Term Investments		8.7
Hotels, Restaurants & Leisure		8.0
Diversified Consumer Services		7.6
Food Products		6.7
Interactive Media & Services		6.6
Semiconductors & Semiconductor Equipment		6.5
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2019.

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

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Asia Opportunity Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $52,163)	$	63,625
Investment in Security of Affiliated Issuer, at Value (Cost $6,052)		6,052
Total Investments in Securities, at Value (Cost $58,215)		69,677
Foreign Currency, at Value (Cost $131)		131
Cash from Securities Lending		1
Dividends Receivable		106
Receivable for Fund Shares Sold		65
Receivable for Investments Sold		15
Receivable from Affiliate		8
Receivable from Securities Lending Income		1
Other Assets		60
Total Assets		70,064
Liabilities:
Payable for Fund Shares Redeemed		470
Payable for Advisory Fees		104
Payable for Professional Fees		62
Payable for Shareholder Services Fees — Class A		3
Payable for Distribution and Shareholder Services Fees — Class C		4
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		5
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Administration Fees		4
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class C		—	@
Collateral on Securities Loaned, at Value		—	@
Other Liabilities		5
Total Liabilities		659
Net Assets	$	69,405
Net Assets Consist of:
Paid-in-Capital	$	60,405
Total Distributable Earnings		9,000
Net Assets	$	69,405

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Asia Opportunity Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	51,339
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,733,471
Net Asset Value, Offering and Redemption Price Per Share	$	18.78
CLASS A:
Net Assets	$	12,471
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		670,455
Net Asset Value, Redemption Price Per Share	$	18.60
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.03
Maximum Offering Price Per Share	$	19.63
CLASS C:
Net Assets	$	5,576
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		305,146
Net Asset Value, Offering and Redemption Price Per Share	$	18.27
CLASS IS:
Net Assets	$	19
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	18.80
(1) Including: Securities on Loan, at Value:	$	2,011

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Asia Opportunity Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $44 of Foreign Taxes Withheld)	$	389
Dividends from Security of Affiliated Issuer (Note G)		49
Income from Securities Loaned — Net		40
Total Investment Income		478
Expenses:
Advisory Fees (Note B)		211
Professional Fees		45
Shareholder Services Fees — Class A (Note D)		14
Distribution and Shareholder Services Fees — Class C (Note D)		19
Registration Fees		29
Administration Fees (Note C)		21
Custodian Fees (Note F)		14
Sub Transfer Agency Fees — Class I		8
Sub Transfer Agency Fees — Class A		2
Sub Transfer Agency Fees — Class C		1
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		7
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Shareholder Reporting Fees		8
Directors' Fees and Expenses		3
Pricing Fees		1
Other Expenses		9
Total Expenses		395
Waiver of Advisory Fees (Note B)		(65	)
Rebate from Morgan Stanley Affiliate (Note G)		(4	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Net Expenses		324
Net Investment Income		154
Realized Loss:
Investments Sold		(146	)
Foreign Currency Translation		(17	)
Net Realized Loss		(163	)
Change in Unrealized Appreciation (Depreciation):
Investments		11,463
Foreign Currency Translation		(1	)
Net Change in Unrealized Appreciation (Depreciation)		11,462
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		11,299
Net Increase in Net Assets Resulting from Operations	$	11,453

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Asia Opportunity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	154		$	(26	)
Net Realized Loss		(163	)		(2,360	)
Net Change in Unrealized Appreciation (Depreciation)		11,462			(5,626	)
Net Increase (Decrease) in Net Assets Resulting from Operations		11,453			(8,012	)
Dividends and Distributions to Shareholders:
Class I		—			(184	)
Class A		—			(55	)
Class C		—			(17	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(256	)
Capital Share Transactions:(1)
Class I:
Subscribed		21,030			25,301
Distributions Reinvested		—			135
Redeemed		(3,689	)		(10,225	)
Class A:
Subscribed		11,593			14,058
Distributions Reinvested		—			55
Redeemed		(8,170	)		(8,094	)
Class C:
Subscribed		2,255			3,603
Distributions Reinvested		—			17
Redeemed		(95	)		(813	)
Net Increase in Net Assets Resulting from Capital Share Transactions		22,924			24,037
Redemption Fees		22			3
Total Increase in Net Assets		34,399			15,772
Net Assets:
Beginning of Period		35,006			19,234
End of Period	$	69,405		$	35,006
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		1,193			1,448
Shares Issued on Distributions Reinvested		—			8
Shares Redeemed		(213	)		(643	)
Net Increase in Class I Shares Outstanding		980			813
Class A:
Shares Subscribed		662			817
Shares Issued on Distributions Reinvested		—			3
Shares Redeemed		(472	)		(510	)
Net Increase in Class A Shares Outstanding		190			310
Class C:
Shares Subscribed		129			208
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(6	)		(53	)
Net Increase in Class C Shares Outstanding		123			156

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Asia Opportunity Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from December 29, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	14.53		$	16.92		$	9.68		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.06			0.01			(0.04	)		(0.03	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		4.18			(2.30	)		7.47			(0.10	)		0.03
Total from Investment Operations		4.24			(2.29	)		7.43			(0.13	)		0.03
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.08	)		—
Net Realized Gain		—			(0.10	)		(0.19	)		—			—
Paid-in-Capital		—			—			—			(0.14	)		—
Total Distributions		—			(0.10	)		(0.19	)		(0.22	)		—
Redemption Fees		0.01			0.00	(3)		0.00	(3)		—			—
Net Asset Value, End of Period	$	18.78		$	14.53		$	16.92		$	9.68		$	10.03
Total Return(4)		29.25	%(6)		(13.65	)%		76.82	%		(1.34	)%		0.30	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	51,339		$	25,479		$	15,913		$	5,405		$	5,587
Ratio of Expenses Before Expense Limitation		1.34	%(7)		1.67	%		3.10	%		5.28	%		125.50	%(7)
Ratio of Expenses After Expense Limitation		1.08	%(5)(7)		1.09	%(5)		1.06	%(5)		1.08	%(5)		1.03	%(5)(7)
Ratio of Net Investment Income (Loss)		0.74	%(5)(7)		0.04	%(5)		(0.27	)%(5)		(0.31	)%(5)		(0.71	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.01	%		0.01	%		0.01	%		0.04	%(7)
Portfolio Turnover Rate		19	%(6)		63	%		50	%		44	%		0	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Asia Opportunity Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from December 29, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	14.42		$	16.84		$	9.67		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.03			(0.04	)		(0.10	)		(0.08	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		4.14			(2.28	)		7.46			(0.09	)		0.03
Total from Investment Operations		4.17			(2.32	)		7.36			(0.17	)		0.03
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.05	)		—
Net Realized Gain		—			(0.10	)		(0.19	)		—			—
Paid-in-Capital		—			—			—			(0.14	)		—
Total Distributions		—			(0.10	)		(0.19	)		(0.19	)		—
Redemption Fees		0.01			0.00	(3)		0.00	(3)		—			—
Net Asset Value, End of Period	$	18.60		$	14.42		$	16.84		$	9.67		$	10.03
Total Return(4)		28.99	%(6)		(13.89	)%		76.17	%		(1.67	)%		0.30	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12,471		$	6,930		$	2,873		$	535		$	10
Ratio of Expenses Before Expense Limitation		1.72	%(7)		2.05	%		3.50	%		6.36	%		139.50	%(7)
Ratio of Expenses After Expense Limitation		1.43	%(5)(7)		1.44	%(5)		1.44	%(5)		1.44	%(5)		1.40	%(5)(7)
Ratio of Net Investment Income (Loss)		0.35	%(5)(7)		(0.22	)%(5)		(0.69	)%(5)		(0.78	)%(5)		(1.09	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.01	%		0.01	%		0.01	%		0.05	%(7)
Portfolio Turnover Rate		19	%(6)		63	%		50	%		44	%		0	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Asia Opportunity Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from December 29, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	14.21		$	16.73		$	9.68		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.02	)		(0.15	)		(0.22	)		(0.14	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		4.07			(2.27	)		7.46			(0.10	)		0.03
Total from Investment Operations		4.05			(2.42	)		7.24			(0.24	)		0.03
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.10	)		(0.19	)		—			—
Paid-in-Capital		—			—			—			(0.11	)		—
Total Distributions		—			(0.10	)		(0.19	)		(0.11	)		—
Redemption Fees		0.01			0.00	(3)		0.00	(3)		—			—
Net Asset Value, End of Period	$	18.27		$	14.21		$	16.73		$	9.68		$	10.03
Total Return(4)		28.57	%(6)		(14.58	)%		74.85	%		(2.44	)%		0.30	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	5,576		$	2,582		$	431		$	10		$	10
Ratio of Expenses Before Expense Limitation		2.39	%(7)		2.80	%		5.26	%		27.34	%		140.25	%(7)
Ratio of Expenses After Expense Limitation		2.13	%(5)(7)		2.19	%(5)		2.19	%(5)		2.19	%(5)		2.17	%(5)(7)
Ratio of Net Investment Loss		(0.30	)%(5)(7)		(0.92	)%(5)		(1.51	)%(5)		(1.42	)%(5)		(1.84	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.01	%		0.01	%		0.01	%		0.03	%(7)
Portfolio Turnover Rate		19	%(6)		63	%		50	%		44	%		0	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Asia Opportunity Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from December 29, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	14.54		$	16.92		$	9.68		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.05			0.01			(0.02	)		(0.03	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		4.20			(2.29	)		7.45			(0.10	)		0.03
Total from Investment Operations		4.25			(2.28	)		7.43			(0.13	)		0.03
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.08	)		—
Net Realized Gain		—			(0.10	)		(0.19	)		—			—
Paid-in-Capital		—			—			—			(0.14	)		—
Total Distributions		—			(0.10	)		(0.19	)		(0.22	)		—
Redemption Fees		0.01			0.00	(3)		0.00	(3)		—			—
Net Asset Value, End of Period	$	18.80		$	14.54		$	16.92		$	9.68		$	10.03
Total Return(4)		29.30	%(6)		(13.59	)%		76.82	%		(1.29	)%		0.30	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	19		$	15		$	17		$	10		$	10
Ratio of Expenses Before Expense Limitation		11.23	%(7)		13.31	%		17.65	%		25.20	%		139.25	%(7)
Ratio of Expenses After Expense Limitation		1.03	%(5)(7)		1.04	%(5)		1.04	%(5)		1.04	%(5)		1.02	%(5)(7)
Ratio of Net Investment Income (Loss)		0.60	%(5)(7)		0.05	%(5)		(0.18	)%(5)		(0.26	)%(5)		(0.69	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.01	%		0.01	%		0.01	%		0.03	%(7)
Portfolio Turnover Rate		19	%(6)		63	%		50	%		44	%		0	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Asia Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices

if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) 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 its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) when market quotations are not readily available, including

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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
Banks	$	6,128	$	—		$	—	$	6,128
Beverages		—		8,768			—		8,768
Capital Markets		—		2,651			—		2,651
Diversified Consumer Services		5,312		—			—		5,312
Entertainment		2,708		—			—		2,708
Food Products		—		4,647			—		4,647
Hotels, Restaurants & Leisure		2,808		2,751			—		5,559
Household Durables		—		2,290			—		2,290
Insurance		—		3,162			—		3,162
Interactive Media & Services		—		4,610			—		4,610
Internet & Direct Marketing Retail		4,752		3,414			—		8,166
Life Sciences Tools & Services		—		2,120			—		2,120
Semiconductors & Semiconductor Equipment		—		4,530			—		4,530
Textiles, Apparel & Luxury Goods		—		2,914			—		2,914
Total Common Stocks		21,708		41,857			—		63,565
Call Options Purchased				60					60
Short-Term Investments
Investment Company		6,052		—			—		6,052
Repurchase Agreements		—		—	@		—		—	@
Total Short-Term Investments		6,052		—	@		—		6,052
Total Assets	$	27,760	$	41,917		$	—	$	69,677

@ Value is less than $500.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the

collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund may not achieve the

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund 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 Fund 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" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	60	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for

the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(29	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(33	)(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	60	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) 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 Fund 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 Fund 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 potential 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

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
BNP Paribas	$	17		$	—	$	—	$	17
Royal Bank of Scotland		43			—		—		43
Total	$	60	(a)	$	—	$	—	$	60

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the six months ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	25,180,000

6.  Securities Lending: The Fund 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 Fund. The Fund 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 Fund'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 Fund has the right under the securities 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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	2,011	(e)	$	—	$	(2,011	)(f)(g)	$	0

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

(f) The Fund received cash collateral of less than $500 which was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $2,053,000 in the form of U.S. Government obligations, which the Fund 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.

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2019:

Remaining Contractual Maturity of the Agreements

Overnight and Continuous (000)

<30 days (000)

Between 30 & 90 days (000)

>90 days (000)

Total (000)

Securities Lending Transactions

Common Stocks

$

—

@

$

—

$

—

$

—

$

—

@

Total Borrowings

$

—

@

$

—

$

—

$

—

$

—

@

Gross amount of recognized liabilities for securities lending transactions

$

—

@

@ Amount is less than $500.

7.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

9.  Dividends and Distributions to Shareholders: Dividends 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.

10.  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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $750 million			Next $750 million			Over $1.5 billion
	0.80	%		0.75	%		0.70	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.54% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund 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, 1.45% for Class A shares, 2.20% for Class C shares and 1.05% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $65,000 of advisory fees were waived and approximately $2,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $27,435,000 and $9,544,000, respectively.

There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $4,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	883	$	23,959	$	18,790	$	49

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	6,052

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	256	$	—	$	195	$	19

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.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2018.

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	37	$	—

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $2,191,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 47.5%.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was better than its peer group average for the one- and three-year periods and for the period since the end of December 2015, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's contractual management fee and total expense ratio were lower than its peer group averages and the actual management fee was higher than its peer group average. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

24

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

25

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

27

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIASOPPSAN
2663722 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Breakout Nations Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	9
Notes to Financial Statements	13
Investment Advisory Agreement Approval	22
Privacy Notice	24
Director and Officer Information	26

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Emerging Markets Breakout Nations Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Emerging Markets Breakout Nations Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Breakout Nations Portfolio Class I	$	1,000.00	$	1,106.90	$	1,019.29	$	5.80	$	5.56		1.11	%
Emerging Markets Breakout Nations Portfolio Class A		1,000.00		1,104.30		1,017.21		7.98		7.65		1.53
Emerging Markets Breakout Nations Portfolio Class C		1,000.00		1,100.70		1,013.49		11.88		11.38		2.28
Emerging Markets Breakout Nations Portfolio Class IS		1,000.00		1,107.90		1,019.44		5.64		5.41		1.08

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Portfolio of Investments

Emerging Markets Breakout Nations Portfolio

	Shares		Value (000)
Common Stocks (80.5%)
Argentina (4.2%)
Banco Macro SA ADR		854	$	62
Globant SA (a)		372		38
Grupo Financiero Galicia SA ADR		1,855		66
Grupo Supervielle SA ADR		874		7
Pampa Energia SA ADR (a)		592		20
YPF SA ADR		1,887		34
				227
Brazil (14.0%)
Ambev SA		23,990		112
Atacadao SA		15,294		88
B3 SA - Brasil Bolsa Balcao		10,255		100
Banco Bradesco SA (Preference)		7,028		69
Itau Unibanco Holding SA (Preference)		13,643		129
Lojas Renner SA		7,198		88
Petroleo Brasileiro SA		10,973		86
Petroleo Brasileiro SA (Preference)		11,380		81
				753
Chile (2.7%)
Banco Santander Chile		1,164,068		87
SACI Falabella		8,541		56
				143
China (10.2%)
Alibaba Group Holding Ltd. ADR (a)		796		135
CSPC Pharmaceutical Group Ltd. (b)		14,000		22
Kweichow Moutai Co., Ltd., Class A		200		29
New Oriental Education & Technology Group, Inc. ADR (a)		354		34
Sinopharm Group Co., Ltd. H Shares (b)		1,600		6
TAL Education Group ADR (a)		887		34
Tencent Holdings Ltd. (b)		6,400		289
				549
Egypt (5.3%)
Commercial International Bank Egypt SAE		5,226		23
Commercial International Bank Egypt SAE GDR		26,345		112
Egyptian Financial Group-Hermes Holding Co.		29,948		31
Egyptian Financial Group-Hermes Holding Co. GDR		23,239		44
Integrated Diagnostics Holdings PLC		10,325		51
Juhayna Food Industries		42,034		26
				287
India (4.1%)
HDFC Bank Ltd. ADR		279		36
ICICI Bank Ltd. ADR		8,639		109
Larsen & Toubro Ltd. GDR		3,314		74
				219
Indonesia (7.5%)
Astra International Tbk PT		142,600		75
Bank Central Asia Tbk PT		31,200		66
Bank Mandiri Persero Tbk PT		129,200		74
Bank Rakyat Indonesia Persero Tbk PT		127,000		39

	Shares		Value (000)
Telekomunikasi Indonesia Persero Tbk PT		282,800	$	83
Unilever Indonesia Tbk PT		21,000		67
				404
Malaysia (2.1%)
Malayan Banking Bhd		34,740		75
Public Bank Bhd		6,900		38
				113
Mexico (7.2%)
Alsea SAB de CV (a)		16,998		33
Fomento Economico Mexicano SAB de CV ADR		1,272		123
Grupo Financiero Banorte SAB de CV Series O		16,526		96
Infraestructura Energetica Nova SAB de CV		8,023		32
Wal-Mart de Mexico SAB de CV		38,389		105
				389
Peru (5.1%)
Cia de Minas Buenaventura SAA ADR		5,030		84
Credicorp Ltd.		840		192
				276
Philippines (3.5%)
Ayala Corp.		1,300		23
Ayala Land, Inc.		27,900		28
Jollibee Foods Corp.		4,750		26
SM Investments Corp.		5,930		112
				189
Poland (4.6%)
Jeronimo Martins SGPS SA		2,673		43
LPP SA		31		63
Powszechna Kasa Oszczednosci Bank Polski SA		5,206		60
Santander Bank Polska SA		841		84
				250
South Africa (4.1%)
AVI Ltd.		4,222		28
Bidvest Group Ltd. (The)		1,650		22
Capitec Bank Holdings Ltd.		405		37
Clicks Group Ltd.		2,720		40
Nedbank Group Ltd.		1,408		25
Reunert Ltd.		2,745		13
Sanlam Ltd.		10,143		56
				221
Turkey (2.8%)
Akbank T.A.S. (a)		51,276		60
Tupras Turkiye Petrol Rafinerileri AS		1,389		28
Turkiye Garanti Bankasi AS (a)		38,072		60
				148
Vietnam (3.1%)
Masan Group Corp. (a)		7,380		26
Sai Gon Cargo Service Corp.		2,060		14
Saigon Beer Alcohol Beverage Corp.		2,530		30
Vietjet Aviation JSC		3,858		21
Vincom Retail JSC		26,503		39
Vinhomes JSC (a)		10,380		35
				165
Total Common Stocks (Cost $3,933)				4,333

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Portfolio of Investments (cont'd)

Emerging Markets Breakout Nations Portfolio

	Shares		Value (000)
Investment Company (5.4%)
India (5.4%)
iShares MSCI India ETF (Cost $265)		8,204	$	290
Short-Term Investment (12.2%)
Investment Company (12.2%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $658)		657,673		658
Total Investments (98.1%) (Cost $4,856) (c)(d)(e)				5,281
Other Assets in Excess of Liabilities (1.9%)				104
Net Assets (100.0%)			$	5,385

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  The approximate fair value and percentage of net assets, $2,153,000 and 40.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

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

(e)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $619,000 and the aggregate gross unrealized depreciation is approximately $191,000, resulting in net unrealized appreciation of approximately $428,000.

ADR  American Depositary Receipt.

ETF  Exchange Traded Fund.

GDR  Global Depositary Receipt.

Foreign Currency Forward Exchange Contract:

The Fund had the following foreign currency forward exchange contract open at June 30, 2019:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (000)
JPMorgan Chase Bank NA	$	62	INR	4,325	7/18/19	$	1

Futures Contract:

The Fund had the following futures contract open at June 30, 2019:

	Number of Contracts		Expiration Date	Notional Amount (000)			Value (000)		Unrealized Appreciation (000)
Long:
SGX NIFTY 50 (Singapore)		26	Jul-19	$	—	@	$	616	$	2

@  —  Value is less than $500.

INR  —  Indian Rupee

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		35.4	%
Banks		30.4
Short-Term Investment		12.4
Beverages		5.6
Investment Company		5.5
Interactive Media & Services		5.5
Food & Staples Retailing		5.2
Total Investments		100.0	%**

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

**  Does not include an open long futures contract with a value of approximately $616,000 with unrealized appreciation of approximately $2,000. Does not include an open foreign currency forward exchange contract with unrealized appreciation of approximately $1,000.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Emerging Markets Breakout Nations Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $4,198)	$	4,623
Investment in Security of Affiliated Issuer, at Value (Cost $658)		658
Total Investments in Securities, at Value (Cost $4,856)		5,281
Foreign Currency, at Value (Cost $15)		15
Due from Adviser		61
Receivable for Variation Margin on Futures Contracts		53
Dividends Receivable		2
Unrealized Appreciation on Foreign Currency Forward Exchange Contract		1
Tax Reclaim Receivable		1
Receivable from Affiliate		1
Other Assets		46
Total Assets		5,461
Liabilities:
Payable for Professional Fees		53
Payable for Custodian Fees		15
Deferred Capital Gain Country Tax		3
Payable for Investments Purchased		1
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		—	@
Other Liabilities		4
Total Liabilities		76
Net Assets	$	5,385
Net Assets Consist of:
Paid-in-Capital	$	4,993
Total Distributable Earnings		392
Net Assets	$	5,385
CLASS I:
Net Assets	$	5,353
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		497,000
Net Asset Value, Offering and Redemption Price Per Share	$	10.77
CLASS A:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Redemption Price Per Share	$	10.69
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.59
Maximum Offering Price Per Share	$	11.28
CLASS C:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	10.49
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	10.78

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Emerging Markets Breakout Nations Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $7 of Foreign Taxes Withheld)	$	65
Dividends from Security of Affiliated Issuer (Note G)		7
Total Investment Income		72
Expenses:
Professional Fees		65
Custodian Fees (Note F)		34
Registration Fees		25
Advisory Fees (Note B)		23
Shareholder Reporting Fees		7
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Pricing Fees		3
Administration Fees (Note C)		2
Directors' Fees and Expenses		2
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		11
Total Expenses		176
Expenses Reimbursed by Adviser (Note B)		(120	)
Waiver of Advisory Fees (Note B)		(23	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		29
Net Investment Income		43
Realized Gain (Loss):
Investments Sold		(35	)
Foreign Currency Forward Exchange Contracts		(13	)
Foreign Currency Translation		—	@
Futures Contracts		29
Net Realized Loss		(19	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $3)		485
Foreign Currency Forward Exchange Contracts		8
Foreign Currency Translation		(—	@)
Futures Contracts		7
Net Change in Unrealized Appreciation (Depreciation)		500
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		481
Net Increase in Net Assets Resulting from Operations	$	524

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Emerging Markets Breakout Nations Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	43		$	29
Net Realized Loss		(19	)		(78	)
Net Change in Unrealized Appreciation (Depreciation)		500			(966	)
Net Increase (Decrease) in Net Assets Resulting from Operations		524			(1,015	)
Dividends and Distributions to Shareholders:
Class I		—			(77	)
Class A		—			(—	@)
Class C		—			(—	@)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(77	)
Total Increase (Decrease) in Net Assets		524			(1,092	)
Net Assets:
Beginning of Period		4,861			5,953
End of Period	$	5,385		$	4,861

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Breakout Nations Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from December 15, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	9.72		$	11.91		$	10.15		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.09			0.06			0.08			0.00	(3)
Net Realized and Unrealized Gain (Loss)		0.96			(2.09	)		2.19			0.15
Total from Investment Operations		1.05			(2.03	)		2.27			0.15
Distributions from and/or in Excess of:
Net Investment Income		—			(0.03	)		(0.05	)		—
Net Realized Gain		—			(0.13	)		(0.46	)		—
Total Distributions		—			(0.16	)		(0.51	)		—
Net Asset Value, End of Period	$	10.77		$	9.72		$	11.91		$	10.15
Total Return(4)		10.69	%(6)		(17.10	)%		22.44	%		1.50	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	5,353		$	4,831		$	5,917		$	5,043
Ratio of Expenses Before Expense Limitation		6.70	%(7)		6.28	%		9.42	%		22.93	%(7)
Ratio of Expenses After Expense Limitation		1.11	%(5)(7)		1.12	%(5)		1.11	%(5)		1.09	%(5)(7)
Ratio of Net Investment Income		1.69	%(5)(7)		0.54	%(5)		0.66	%(5)		0.67	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.04	%(7)
Portfolio Turnover Rate		12	%(6)		36	%		79	%		16	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Breakout Nations Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from December 15, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	9.67		$	11.90		$	10.14		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.06			0.01			0.03			0.00	(3)
Net Realized and Unrealized Gain (Loss)		0.96			(2.08	)		2.20			0.14
Total from Investment Operations		1.02			(2.07	)		2.23			0.14
Distributions from and/or in Excess of:
Net Investment Income		—			(0.03	)		(0.01	)		—
Net Realized Gain		—			(0.13	)		(0.46	)		—
Total Distributions		—			(0.16	)		(0.47	)		—
Net Asset Value, End of Period	$	10.69		$	9.67		$	11.90		$	10.14
Total Return(4)		10.43	%(6)		(17.45	)%		22.01	%		1.40	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	10		$	12		$	10
Ratio of Expenses Before Expense Limitation		22.55	%(7)		23.28	%		27.13	%		37.02	%(7)
Ratio of Expenses After Expense Limitation		1.53	%(5)(7)		1.53	%(5)		1.53	%(5)		1.51	%(5)(7)
Ratio of Net Investment Income		1.27	%(5)(7)		0.12	%(5)		0.25	%(5)		0.24	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.04	%(7)
Portfolio Turnover Rate		12	%(6)		36	%		79	%		16	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Breakout Nations Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from December 15, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	9.53		$	11.80		$	10.14		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.03			(0.07	)		(0.06	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		0.93			(2.04	)		2.18			0.14
Total from Investment Operations		0.96			(2.11	)		2.12			0.14
Distributions from and/or in Excess of:
Net Investment Income		—			(0.03	)		(0.00	)(3)		—
Net Realized Gain		—			(0.13	)		(0.46	)		—
Total Distributions		—			(0.16	)		(0.46	)		—
Net Asset Value, End of Period	$	10.49		$	9.53		$	11.80		$	10.14
Total Return(4)		10.07	%(6)		(18.09	)%		21.09	%		1.40	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10		$	10		$	12		$	10
Ratio of Expenses Before Expense Limitation		23.57	%(7)		24.22	%		26.78	%		37.76	%(7)
Ratio of Expenses After Expense Limitation		2.28	%(5)(7)		2.28	%(5)		2.28	%(5)		2.26	%(5)(7)
Ratio of Net Investment Income (Loss)		0.52	%(5)(7)		(0.62	)%(5)		(0.50	)%(5)		(0.50	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.04	%(7)
Portfolio Turnover Rate		12	%(6)		36	%		79	%		16	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Breakout Nations Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from December 15, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	9.73		$	11.91		$	10.15		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.09			0.06			0.08			0.00	(3)
Net Realized and Unrealized Gain (Loss)		0.96			(2.08	)		2.19			0.15
Total from Investment Operations		1.05			(2.02	)		2.27			0.15
Distributions from and/or in Excess of:
Net Investment Income		—			(0.03	)		(0.05	)		—
Net Realized Gain		—			(0.13	)		(0.46	)		—
Total Distributions		—			(0.16	)		(0.51	)		—
Net Asset Value, End of Period	$	10.78		$	9.73		$	11.91		$	10.15
Total Return(4)		10.79	%(6)		(17.10	)%		22.47	%		1.50	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	10		$	12		$	10
Ratio of Expenses Before Expense Limitation		22.20	%(7)		20.74	%		25.68	%		36.76	%(7)
Ratio of Expenses After Expense Limitation		1.08	%(5)(7)		1.08	%(5)		1.08	%(5)		1.06	%(5)(7)
Ratio of Net Investment Income		1.72	%(5)(7)		0.58	%(5)		0.69	%(5)		0.70	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%		0.02	%		0.04	%(7)
Portfolio Turnover Rate		12	%(6)		36	%		79	%		16	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Emerging Markets Breakout Nations Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued

at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (5) 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

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	—	$	14	$	—	$	14
Airlines		—		21		—		21
Automobiles		—		75		—		75
Banks		853		753		—		1,606
Beverages		235		59		—		294
Capital Markets		144		31		—		175
Construction & Engineering		—		74		—		74
Diversified Consumer Services		68		—		—		68
Diversified Financial Services		—		23		—		23
Diversified Telecommunication Services		—		83		—		83
Electric Utilities		20		—		—		20
Food & Staples Retailing		193		83		—		276
Food Products		—		80		—		80
Gas Utilities		32		—		—		32
Health Care Providers & Services		—		57		—		57
Hotels, Restaurants & Leisure		33		26		—		59
Household Products		—		67		—		67
Industrial Conglomerates		—		147		—		147
Insurance		—		56		—		56
Interactive Media & Services		—		289		—		289
Internet & Direct Marketing Retail		135		—		—		135
Metals & Mining		84		—		—		84
Multi-Line Retail		144		—		—		144
Oil, Gas & Consumable Fuels		201		28		—		229
Pharmaceuticals		—		22		—		22
Real Estate Management & Development		—		102		—		102
Software		38		—		—		38
Textiles, Apparel & Luxury Goods		—		63		—		63
Total Common Stocks		2,180		2,153		—		4,333
Investment Company		290		—		—		290
Short-Term Investment
Investment Company		658		—		—		658
Foreign Currency Forward Exchange Contract		—		1		—		1
Futures Contract		2		—		—		2
Total Assets	$	3,130	$	2,154	$	—	$	5,284

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are

maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

A significant portion of the Fund's net assets consist of securities of issuers located in emerging markets, which are denominated in foreign currencies. Such securities may be concentrated in a limited number of countries and regions and may vary throughout the year. Changes in currency exchange rates will affect the value of securities and

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

investment income from foreign currency denominated securities. Emerging market securities are often subject to greater price volatility, limited capitalization and liquidity, and higher rates of inflation than securities of companies based in the U.S. In addition, emerging market issuers may be subject to substantial governmental involvement in the economy and greater social, economic and political uncertainty.

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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund 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 may 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 Fund's securities are not denominated. Unanticipated changes in currency

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

prices may result in poorer overall performance for the Fund 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 Fund as unrealized gain or loss. The Fund 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 Fund'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 Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

FASB ASC 815, "Derivatives and Hedging" ("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 Fund uses derivative instruments, how these derivative instruments

are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Appreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	1
Futures Contract	Variation Margin on Futures Contract	Equity Risk		2	(a)
Total			$	3

(a) This amount represents the cumulative appreciation 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 Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(13	)
Equity Risk	Futures Contracts		29
Total		$	16
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	8
Equity Risk	Futures Contracts		7
Total		$	15

At June 30, 2019, the Fund'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 Contract	$	1	$	—

(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 Fund 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.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund 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 potential 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 Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
JPMorgan Chase Bank NA	$	1	$	—	$	—	$	1

For the six months ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	41,000
Futures Contracts:
Average monthly notional value	$	1,208,000

5.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.90	%		0.85	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that 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 I shares, 1.55% for Class A shares, 2.30% for Class C shares and 1.10% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $23,000 of advisory fees were waived and approximately $123,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $775,000 and $519,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	819	$	529	$	690	$	7

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	658

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the period ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the three-year period ended December 31, 2018 remains subject to examination by taxing authorities

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	35	$	35	$	243	$	8

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 in 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 a dividend redesignation and a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)		Paid-in- Capital (000)
$	7	$	(7	)

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

At December 31, 2018, the Fund had available unused short-term capital losses of approximately $64,000 that do not have an expiration date.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund did not have record owners of 10% or greater.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the one-year period and for the period since the end of December 2016, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

23

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

24

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

25

Morgan Stanley Institutional Fund Trust

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

26

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIEMBONSAN
2663735 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Fixed Income Opportunities Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	10
Statement of Operations	12
Statements of Changes in Net Assets	13
Financial Highlights	15
Notes to Financial Statements	20
Investment Advisory Agreement Approval	29
Privacy Notice	31
Director and Officer Information	33

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Emerging Markets Fixed Income Opportunities Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Emerging Markets Fixed Income Opportunities Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Fixed Income Opportunities Portfolio Class I	$	1,000.00	$	1,107.30	$	1,020.68	$	4.34	$	4.16		0.83	%
Emerging Markets Fixed Income Opportunities Portfolio Class A		1,000.00		1,105.30		1,018.94		6.16		5.91		1.18
Emerging Markets Fixed Income Opportunities Portfolio Class L		1,000.00		1,103.50		1,017.70		7.46		7.15		1.43
Emerging Markets Fixed Income Opportunities Portfolio Class C		1,000.00		1,100.60		1,015.22		10.05		9.64		1.93
Emerging Markets Fixed Income Opportunities Portfolio Class IS		1,000.00		1,107.40		1,020.83		4.18		4.01		0.80

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Emerging Markets Fixed Income Opportunities Portfolio

	Face Amount (000)		Value (000)
Fixed Income Securities (87.8%)
Angola (0.9%)
Sovereign (0.9%)
Angolan Government International Bond, 9.38%, 5/8/48 (a)	$	420	$	464
Argentina (4.1%)
Corporate Bonds (2.2%)
Banco Macro SA,
17.50%, 5/8/22 (a)	ARS	1,080		16
Province of Santa Fe,
6.90%, 11/1/27 (a)	$	400		324
Provincia de Cordoba,
7.45%, 9/1/24 (a)		330		261
Provincia de Entre Rios Argentina,
8.75%, 2/8/25 (a)		230		170
Provincia de Mendoza Argentina,
BADLAR + 4.38%, 50.87%, 6/9/21 (b)	ARS	3,570		70
Provincia de Rio Negro,
7.75%, 12/7/25 (a)	$	150		99
Provincia del Chaco Argentina,
9.38%, 8/18/24 (a)		240		178
				1,118
Sovereign (1.9%)
Argentina POM Politica Monetaria,
63.70%, 6/21/20 (b)	ARS	8,650		200
Argentine Republic Government International Bond,
6.88%, 4/22/21 - 1/11/48	$	810		684
7.13%, 6/28/17		100		75
				959
				2,077
Azerbaijan (0.9%)
Sovereign (0.9%)
Republic of Azerbaijan International Bond,
3.50%, 9/1/32		210		198
Southern Gas Corridor CJSC, 6.88%, 3/24/26		200		232
				430
Bahrain (0.6%)
Sovereign (0.6%)
Bahrain Government International Bond, 7.50%, 9/20/47		300		319
Belarus (0.4%)
Sovereign (0.4%)
Republic of Belarus International Bond, 6.20%, 2/28/30 (a)		200		215

	Face Amount (000)		Value (000)
Brazil (8.3%)
Corporate Bonds (3.0%)
CSN Resources SA,
7.63%, 4/17/26 (a)	$	260	$	277
Embraer Netherlands Finance BV,
5.05%, 6/15/25		90		97
5.40%, 2/1/27		82		91
Hidrovias International Finance SARL,
5.95%, 1/24/25 (a)		200		205
5.95%, 1/24/25		400		410
Minerva Luxembourg SA,
5.88%, 1/19/28 (a)		200		201
Suzano Austria GmbH,
7.00%, 3/16/47		200		228
				1,509
Sovereign (5.3%)
Brazil Notas do Tesouro Nacional, Series F,
10.00%, 1/1/21 - 1/1/27	BRL	9,257		2,691
				4,200
Chile (1.6%)
Corporate Bonds (1.2%)
Cencosud SA,
5.15%, 2/12/25	$	200		212
6.63%, 2/12/45		200		217
Geopark Ltd.,
6.50%, 9/21/24 (a)		200		207
				636
Sovereign (0.4%)
Bonos de la Tesoreria de la Republica en pesos,
4.50%, 3/1/26	CLP	140,000		224
				860
China (2.2%)
Corporate Bonds (2.2%)
China Aoyuan Group Ltd.,
5.38%, 9/13/22	$	230		225
China Evergrande Group,
8.25%, 3/23/22		250		242
China SCE Group Holdings Ltd.,
7.45%, 4/17/21		220		225
Fufeng Group Ltd.,
5.88%, 8/28/21		200		209
Sunac China Holdings Ltd.,
7.88%, 2/15/22		200		204
				1,105

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Fixed Income Opportunities Portfolio

	Face Amount (000)		Value (000)
Colombia (6.1%)
Corporate Bonds (3.5%)
Canacol Energy Ltd.,
7.25%, 5/3/25 (a)	$	400	$	418
Gran Tierra Energy, Inc.,
7.75%, 5/23/27 (a)		230		227
Millicom International Cellular SA,
6.00%, 3/15/25		685		714
Termocandelaria Power Ltd.,
7.88%, 1/30/29 (a)		400		439
				1,798
Sovereign (2.6%)
Colombian TES, Series B
6.00%, 4/28/28	COP	518,200		162
6.25%, 11/26/25		726,000		235
7.00%, 5/4/22 – 6/30/32		556,500		184
7.50%, 8/26/26		1,138,000		393
7.75%, 9/18/30		30,000		10
10.00%, 7/24/24		847,300		320
				1,304
				3,102
Costa Rica (0.4%)
Sovereign (0.4%)
Costa Rica Government International Bond, 7.16%, 3/12/45	$	220		221
Dominican Republic (1.2%)
Corporate Bond (0.8%)
AES Andres BV/Dominican Power Partners/Empresa Generadora de Electricidad It, (Units) 7.95%, 5/11/26 (a)(c)		400		435
Sovereign (0.4%)
Dominican Republic International Bond,
9.75%, 6/5/26 (a)	DOP	10,550		212
				647
Ecuador (1.7%)
Sovereign (1.7%)
Ecuador Government International Bond,
8.88%, 10/23/27	$	610		637
10.75%, 1/31/29 (a)		200		226
				863
Egypt (1.0%)
Sovereign (1.0%)
Egypt Government International Bond,
4.75%, 4/16/26	EUR	100		114
6.38%, 4/11/31 (a)		330		383
				497

	Face Amount (000)		Value (000)
El Salvador (0.2%)
Sovereign (0.2%)
El Salvador Government International Bond, 8.63%, 2/28/29 (a)	$	80	$	91
Georgia (0.3%)
Corporate Bond (0.3%)
Bank of Georgia JSC, 11.00%, 6/1/20 (a)	GEL	500		177
Ghana (1.3%)
Sovereign (1.3%)
Ghana Government International Bond,
8.63%, 6/16/49 (a)	$	260		263
8.95%, 3/26/51 (a)		200		208
Kosmos Energy Ltd.,
7.13%, 4/4/26 (a)		200		202
				673
Hungary (0.9%)
Sovereign (0.9%)
Hungary Government Bond,
3.00%, 10/27/27	HUF	73,220		273
5.50%, 6/24/25		39,170		167
				440
India (0.9%)
Corporate Bonds (0.9%)
Greenko Investment Co.,
4.88%, 8/16/23 (a)	$	240		234
Shriram Transport Finance Co. Ltd.,
5.95%, 10/24/22 (a)		200		203
				437
Indonesia (6.3%)
Corporate Bonds (1.2%)
Jababeka International BV,
6.50%, 10/5/23 (a)		460		444
Soechi Capital Pte Ltd.,
8.38%, 1/31/23 (a)		200		168
				612
Sovereign (5.1%)
Indonesia Government International Bond,
5.35%, 2/11/49		200		240
Indonesia Treasury Bond,
7.50%, 8/15/32	IDR	7,310,000		509
8.13%, 5/15/24		10,167,000		760
8.38%, 3/15/34		2,400,000		181
8.75%, 5/15/31		1,310,000		101
9.00%, 3/15/29		1,395,000		109
Pertamina Persero PT,
6.50%, 11/7/48 (a)	$	200		248
Perusahaan Listrik Negara PT,
6.15%, 5/21/48 (a)		400		476
				2,624
				3,236

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Fixed Income Opportunities Portfolio

	Face Amount (000)		Value (000)
Iraq (0.4%)
Sovereign (0.4%)
Iraq International Bond, 6.75%, 3/9/23 (a)	$	200	$	206
Jamaica (0.5%)
Corporate Bond (0.0%)
Digicel Group Two Ltd., 8.25%, 9/30/22		69		16
Sovereign (0.5%)
Jamaica Government International Bond,
8.00%, 3/15/39		200		248
				264
Jordan (0.8%)
Sovereign (0.8%)
Jordan Government International Bond, 7.38%, 10/10/47 (a)		400		414
Kenya (0.4%)
Sovereign (0.4%)
Kenya Government International Bond, 8.00%, 5/22/32 (a)		200		212
Lebanon (0.4%)
Sovereign (0.4%)
Lebanon Government International Bond, 6.85%, 3/23/27		266		212
Malaysia (1.9%)
Sovereign (1.9%)
Malaysia Government Bond,
3.66%, 10/15/20	MYR	137		33
3.96%, 9/15/25		1,627		403
4.16%, 7/15/21		875		213
4.18%, 7/15/24		762		191
4.23%, 6/30/31		246		62
4.50%, 4/15/30		249		64
				966
Mexico (9.3%)
Corporate Bonds (2.1%)
Alfa SAB de CV,
6.88%, 3/25/44	$	200		223
Alpha Holding SA de CV,
10.00%, 12/19/22 (a)		200		192
Financiera Independencia SAB de CV SOFOM ENR,
8.00%, 7/19/24 (a)		250		227
Trust F/1401,
6.39%, 1/15/50 (a)		240		247
Unifin Financiera SAB de CV SOFOM ENR,
8.88%, 1/29/25 (a)(d)		200		185
				1,074

	Face Amount (000)		Value (000)
Sovereign (7.2%)
Mexican Bonos, Series M
6.50%, 6/10/21	MXN	6,594	$	337
7.50%, 6/3/27		13,160		685
7.75%, 5/29/31		3,017		159
8.00%, 6/11/20 - 12/7/23		7,672		403
10.00%, 12/5/24		15,528		903
Petroleos Mexicanos,
6.35%, 2/12/48	$	300		259
6.50%, 3/13/27 - 1/23/29		666		654
6.75%, 9/21/47		310		277
				3,677
				4,751
Moldova (0.5%)
Corporate Bond (0.5%)
Aragvi Finance International DAC, 12.00%, 4/9/24 (a)		260		265
Nigeria (2.9%)
Corporate Bonds (1.6%)
Fidelity Bank PLC,
10.50%, 10/16/22 (a)		420		456
United Bank for Africa PLC,
7.75%, 6/8/22 (a)		340		357
				813
Sovereign (1.3%)
Nigeria Government International Bond,
6.38%, 7/12/23		200		212
7.14%, 2/23/30 (a)		200		203
9.25%, 1/21/49 (a)		200		227
				642
				1,455
Panama (0.8%)
Corporate Bond (0.4%)
Empresa de Transmision Electrica SA,
5.13%, 5/2/49 (a)		200		219
Sovereign (0.4%)
Aeropuerto Internacional de Tocumen SA,
5.63%, 5/18/36 (a)		200		226
				445
Paraguay (1.3%)
Sovereign (1.3%)
Paraguay Government International Bond,
4.70%, 3/27/27 (a)		400		434
5.40%, 3/30/50 (a)		200		223
				657

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Fixed Income Opportunities Portfolio

	Face Amount (000)		Value (000)
Peru (1.5%)
Sovereign (1.5%)
Peru Government Bond,
5.40%, 8/12/34 (a)	PEN	129	$	40
6.15%, 8/12/32 (a)		821		274
Peruvian Government International Bond, (Units)
6.35%, 8/12/28 (c)		1,273		434
				748
Philippines (0.4%)
Corporate Bond (0.4%)
SMC Global Power Holdings Corp., 6.50%, 4/25/24 (d)	$	200		204
Poland (5.1%)
Sovereign (5.1%)
Republic of Poland Government Bond,
2.50%, 7/25/27	PLN	2,090		567
3.25%, 7/25/25		3,014		859
4.00%, 10/25/23		1,455		423
5.75%, 10/25/21 - 9/23/22		400		118
Republic of Poland Government International Bond,
5.00%, 3/23/22	$	570		613
				2,580
Qatar (1.9%)
Sovereign (1.9%)
Qatar Government International Bond, 4.82%, 3/14/49 (a)		830		953
Romania (0.6%)
Sovereign (0.6%)
Romania Government Bond, 4.75%, 2/24/25	RON	1,160		286
Russia (4.1%)
Sovereign (4.1%)
Russian Federal Bond - OFZ,
6.90%, 5/23/29	RUB	50,700		781
7.95%, 10/7/26		35,360		583
Russian Foreign Bond - Eurobond,
5.63%, 4/4/42	$	600		705
				2,069
Saudi Arabia (0.8%)
Sovereign (0.8%)
Saudi Government International Bond,
5.25%, 1/16/50 (a)		340		387
Senegal (0.8%)
Sovereign (0.8%)
Senegal Government International Bond,
6.25%, 5/23/33 (a)		400		388
South Africa (4.6%)
Corporate Bond (1.0%)
Gold Fields Orogen Holdings BVI Ltd.,
5.13%, 5/15/24 (a)		510		533

	Face Amount (000)		Value (000)
Sovereign (3.6%)
Eskom Holdings SOC Ltd.,
7.13%, 2/11/25	$	200	$	210
8.45%, 8/10/28 (a)		200		226
Republic of South Africa Government Bond,
8.25%, 3/31/32	ZAR	4,672		309
8.75%, 1/31/44		820		53
9.00%, 1/31/40		1,500		101
South Africa Government Bond,
6.75%, 3/31/21		770		55
8.00%, 1/31/30		13,401		899
				1,853
				2,386
Sri Lanka (1.3%)
Sovereign (1.3%)
Sri Lanka Government International Bond,
6.75%, 4/18/28	$	200		194
7.55%, 3/28/30 (a)		250		250
7.85%, 3/14/29 (a)		200		207
				651
Tajikistan (0.5%)
Sovereign (0.5%)
Republic of Tajikistan International Bond,
7.13%, 9/14/27		250		238
Tanzania, United Republic of (0.4%)
Corporate Bond (0.4%)
HTA Group Ltd.,
9.13%, 3/8/22 (a)		200		211
Thailand (1.0%)
Sovereign (1.0%)
Thailand Government Bond, 4.88%, 6/22/29	THB	13,054		531
Togo (0.9%)
Corporate Bond (0.9%)
Ecobank Transnational, Inc., 9.50%, 4/18/24 (a)	$	430		475
Turkey (1.0%)
Sovereign (1.0%)
Turkey Government Bond,
8.00%, 3/12/25	TRY	133		16
11.00%, 2/24/27		586		78
Turkey Government International Bond,
7.25%, 12/23/23	$	400		414
				508
Ukraine (2.5%)
Sovereign (2.5%)
Ukraine Government International Bond,
6.75%, 6/20/26 (a)	EUR	100		121
7.75%, 9/1/23 - 9/1/26	$	333		348
9.75%, 11/1/28 (a)		200		226
9.75%, 11/1/28		520		588
				1,283

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Fixed Income Opportunities Portfolio

	Face Amount (000)		Value (000)
United Arab Emirates (1.4%)
Corporate Bonds (1.4%)
DP World PLC,
5.63%, 9/25/48 (a)	$	400	$	444
MAF Global Securities Ltd.,
6.38%, 3/20/26 (d)		250		246
				690
Venezuela (0.5%)
Sovereign (0.5%)
Petroleos de Venezuela SA,
6.00%, 11/15/26 (e)(f)		1,582		253
Total Fixed Income Securities (Cost $43,850)				44,742
	No. of Warrants
Warrant (0.0%)
Venezuela (0.0%)
Venezuela Government International Bond, Oil-Linked Payment Obligation, 0.00%, expires 4/15/20 (g) (Cost $—)		495		1
	Shares
Short-Term Investments (10.2%)
Investment Company (7.4%)
United States (7.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $3,765)		3,764,754		3,765
	Face Amount (000)
Egypt (1.9%)
Sovereign (1.9%)
Egypt Treasury Bills,
17.20%, 9/10/19	EGP	5,000		291
17.50%, 9/10/19		4,625		269
17.58%, 9/10/19		6,875		400
				960
Nigeria (0.8%)
Sovereign (0.8%)
Nigeria Treasury Bills,
17.95%, 2/27/20	NGN	38,372		98
18.30%, 2/27/20		46,512		119
19.10%, 2/27/20		86,116		220
				437
Total Sovereign (Cost $1,345)				1,397

	Face Amount (000)		Value (000)
U.S. Treasury Security (0.1%)
U.S. Treasury Bill,
2.35%, 11/21/19 (h) (Cost $30)	$	30	$	30
Total Short-Term Investments (Cost $5,140)				5,192
Total Investments (98.0%) (Cost $48,990) (i)(j)				49,935
Other Assets in Excess of Liabilities (2.0%)				1,038
Net Assets (100.0%)			$	50,973

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

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

(b)  Floating or Variable rate securities: The rates disclosed are as of June 30, 2019. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description in the Portfolio of Investments. Certain variable rate securities may not be based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description in the Portfolio of Investments.

(c)  Consists of one or more classes of securities traded together as a unit.

(d)  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, 2019.

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

(f)  Issuer in bankruptcy.

(g)  Security has been deemed illiquid at June 30, 2019.

(h)  Rate shown is the yield to maturity at June 30, 2019.

(i)  Securities are available for collateral in connection with open foreign currency forward exchange contracts.

(j)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $2,282,000 and the aggregate gross unrealized depreciation is approximately $1,353,000, resulting in net unrealized appreciation of approximately $929,000.

BADLAR  Buenos Aires Deposits of Large Amount Rate.

OFZ  Obilgatsyi Federal'novo Zaima (Russian Federal Loan Obligation).

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Fixed Income Opportunities Portfolio

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at June 30, 2019:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
State Street Bank and Trust Co.	BRL	1,703	$	444	7/2/19	$	1
State Street Bank and Trust Co.	BRL	1,703	$	425	7/2/19		(18	)
State Street Bank and Trust Co.	$	444	BRL	1,703	7/2/19		(1	)
State Street Bank and Trust Co.	$	445	BRL	1,703	7/2/19		(1	)
Bank of America NA	HUF	28,960	$	102	9/27/19		(—	@)
BNP Paribas SA	$	452	THB	13,850	9/27/19		1
Citibank NA	$	103	RON	429	9/27/19		(—	@)
Goldman Sachs International	MXN	16,260	$	833	9/27/19		(2	)
Goldman Sachs International	$	620	CLP	422,100	9/27/19		3
Goldman Sachs International	$	118	COP	378,250	9/27/19		(1	)
JPMorgan Chase Bank NA	EUR	530	$	608	9/27/19		1
State Street Bank and Trust Co.	BRL	1,703	$	441	10/2/19		1
						$	(16	)

@    Value is less than $500.

ARS  —  Argentine Peso

BRL  —  Brazilian Real

CLP  —  Chilean Peso

COP  —  Colombian Peso

DOP  —  Dominican Peso

EGP  —  Egyptian Pound

EUR  —  Euro

GEL  —  Georgian Lari

HUF  —  Hungarian Forint

IDR  —  Indonesian Rupiah

MXN  —  Mexican Peso

MYR  —  Malaysian Ringgit

NGN  —  Nigerian Naira

PEN  —  Peruvian Nuevo Sol

PLN  —  Polish Zloty

RON  —  Romanian New Leu

RUB  —  Russian Ruble

THB  —  Thai Baht

TRY  —  Turkish Lira

USD  —  United States Dollar

ZAR  —  South African Rand

Portfolio Composition

Classification	Percentage of Total Investments
Sovereign		64.9	%
Corporate Bonds		24.7
Short-Term Investments		10.4
Other*		0.0	**
Total Investments		100.0	%***

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

**  Amount is less than 0.05%.

***  Does not include open foreign currency forward exchange contracts with net unrealized depreciation of approximately $16,000.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Fixed Income Opportunities Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $45,225)	$	46,170
Investment in Security of Affiliated Issuer, at Value (Cost $3,765)		3,765
Total Investments in Securities, at Value (Cost $48,990)		49,935
Foreign Currency, at Value (Cost $18)		18
Interest Receivable		892
Receivable for Fund Shares Sold		200
Tax Reclaim Receivable		10
Receivable from Affiliate		8
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		7
Due from Broker		4
Dividends Receivable		—	@
Other Assets		70
Total Assets		51,144
Liabilities:
Payable for Professional Fees		65
Deferred Capital Gain Country Tax		29
Payable for Advisory Fees		28
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		23
Payable for Fund Shares Redeemed		10
Payable for Custodian Fees		4
Payable for Administration Fees		3
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Investments Purchased		—	@
Other Liabilities		8
Total Liabilities		171
Net Assets	$	50,973
Net Assets Consist of:
Paid-in-Capital	$	54,847
Total Accumulated Loss		(3,874	)
Net Assets	$	50,973

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Fixed Income Opportunities Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	46,980
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,048,164
Net Asset Value, Offering and Redemption Price Per Share	$	9.31
CLASS A:
Net Assets	$	1,981
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		213,223
Net Asset Value, Redemption Price Per Share	$	9.29
Maximum Sales Load		4.25	%
Maximum Sales Charge	$	0.41
Maximum Offering Price Per Share	$	9.70
CLASS L:
Net Assets	$	742
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		80,001
Net Asset Value, Offering and Redemption Price Per Share	$	9.27
CLASS C:
Net Assets	$	499
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		53,941
Net Asset Value, Offering and Redemption Price Per Share	$	9.24
CLASS IS:
Net Assets	$	771
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		82,846
Net Asset Value, Offering and Redemption Price Per Share	$	9.31

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Fixed Income Opportunities Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers (Net of $14 of Foreign Taxes Withheld)	$	1,400
Dividends from Security of Affiliated Issuer (Note G)		45
Total Investment Income		1,445
Expenses:
Advisory Fees (Note B)		160
Professional Fees		53
Registration Fees		25
Administration Fees (Note C)		17
Custodian Fees (Note F)		14
Shareholder Reporting Fees		8
Pricing Fees		7
Shareholder Services Fees — Class A (Note D)		2
Distribution and Shareholder Services Fees — Class L (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		1
Sub Transfer Agency Fees — Class I		4
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		3
Other Expenses		11
Total Expenses		313
Waiver of Advisory Fees (Note B)		(121	)
Rebate from Morgan Stanley Affiliate (Note G)		(4	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Net Expenses		184
Net Investment Income		1,261
Realized Gain (Loss):
Investments Sold (Net of $6 of Capital Gain Country Tax)		(245	)
Foreign Currency Forward Exchange Contracts		(80	)
Foreign Currency Translation		3
Net Realized Loss		(322	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $22)		3,311
Foreign Currency Forward Exchange Contracts		17
Foreign Currency Translation		2
Net Change in Unrealized Appreciation (Depreciation)		3,330
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		3,008
Net Increase in Net Assets Resulting from Operations	$	4,269

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Emerging Markets Fixed Income Opportunities Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	1,261		$	1,695
Net Realized Loss		(322	)		(736	)
Net Change in Unrealized Appreciation (Depreciation)		3,330			(2,875	)
Net Increase (Decrease) in Net Assets Resulting from Operations		4,269			(1,916	)
Dividends and Distributions to Shareholders:
Class I		(523	)		(1,377	)
Class A		(17	)		(66	)
Class L		(8	)		(36	)
Class C		(4	)		(12	)
Class IS		(9	)		(39	)
Total Dividends and Distributions to Shareholders		(561	)		(1,530	)
Capital Share Transactions:(1)
Class I:
Subscribed		12,125			16,805
Distributions Reinvested		522			407
Redeemed		(1,667	)		(3,837	)
Class A:
Subscribed		939			2,017
Distributions Reinvested		17			57
Redeemed		(419	)		(1,712	)
Class L:
Distributions Reinvested		8			32
Redeemed		(56	)		(51	)
Class C:
Subscribed		432			17
Distributions Reinvested		4			11
Redeemed		(4	)		(230	)
Class IS:
Subscribed		724			—
Distributions Reinvested		—	@		—
Redeemed		(688	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		11,937			13,516
Redemption Fees		—	@		—	@
Total Increase in Net Assets		15,645			10,070
Net Assets:
Beginning of Period		35,328			25,258
End of Period	$	50,973		$	35,328

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Emerging Markets Fixed Income Opportunities Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		1,352			1,896
Shares Issued on Distributions Reinvested		58			47
Shares Redeemed		(187	)		(414	)
Net Increase in Class I Shares Outstanding		1,223			1,529
Class A:
Shares Subscribed		104			213
Shares Issued on Distributions Reinvested		2			6
Shares Redeemed		(46	)		(185	)
Net Increase in Class A Shares Outstanding		60			34
Class L:
Shares Issued on Distributions Reinvested		1			4
Shares Redeemed		(7	)		(6	)
Net Decrease in Class L Shares Outstanding		(6	)		(2	)
Class C:
Shares Subscribed		48			2
Shares Issued on Distributions Reinvested		—	@@		1
Shares Redeemed		(—	@@)		(27	)
Net Increase (Decrease) in Class C Shares Outstanding		48			(24	)
Class IS:
Shares Subscribed		81			—
Shares Issued on Distributions Reinvested		—	@@		—
Shares Redeemed		(77	)		—
Net Increase in Class IS Shares Outstanding		4			—

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Fixed Income Opportunities Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	8.52		$	9.68		$	9.07		$	8.53		$	9.22		$	9.40
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.26			0.57			0.65			0.67			0.52			0.51
Net Realized and Unrealized Gain (Loss)		0.65			(1.24	)		0.52			0.42			(0.68	)		(0.19	)
Total from Investment Operations		0.91			(0.67	)		1.17			1.09			(0.16	)		0.32
Distributions from and/or in Excess of:
Net Investment Income		(0.12	)		(0.49	)		(0.56	)		(0.55	)		(0.53	)		(0.50	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—
Net Asset Value, End of Period	$	9.31		$	8.52		$	9.68		$	9.07		$	8.53		$	9.22
Total Return(4)		10.73	%(7)		(6.93	)%		12.94	%		12.80	%		(1.83	)%		3.38	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	46,980		$	32,575		$	22,219		$	20,332		$	19,219		$	18,492
Ratio of Expenses Before Expense Limitation		1.41	%(8)		1.98	%		2.01	%		2.03	%		1.82	%		1.91	%
Ratio of Expenses After Expense Limitation		0.83	%(5)(8)		0.84	%(5)		0.83	%(5)		0.84	%(5)		0.83	%(5)		0.83	%(5)
Ratio of Net Investment Income		5.94	%(5)(8)		6.24	%(5)		6.73	%(5)		7.32	%(5)		5.74	%(5)		5.23	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(8)		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		36	%(7)		47	%		77	%		116	%		111	%		95	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Fixed Income Opportunities Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	8.51		$	9.67		$	9.06		$	8.52		$	9.21		$	9.40
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.25			0.52			0.61			0.64			0.50			0.47
Net Realized and Unrealized Gain (Loss)		0.64			(1.22	)		0.52			0.42			(0.69	)		(0.19	)
Total from Investment Operations		0.89			(0.70	)		1.13			1.06			(0.19	)		0.28
Distributions from and/or in Excess of:
Net Investment Income		(0.11	)		(0.46	)		(0.52	)		(0.52	)		(0.50	)		(0.47	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—
Net Asset Value, End of Period	$	9.29		$	8.51		$	9.67		$	9.06		$	8.52		$	9.21
Total Return(4)		10.53	%(7)		(7.29	)%		12.54	%		12.53	%		(2.14	)%		2.90	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,981		$	1,306		$	1,150		$	972		$	1,103		$	291
Ratio of Expenses Before Expense Limitation		1.84	%(8)		2.49	%		2.51	%		2.28	%		2.49	%		2.85	%
Ratio of Expenses After Expense Limitation		1.18	%(5)(8)		1.19	%(5)		1.19	%(5)		1.09	%(5)		1.20	%(5)		1.20	%(5)
Ratio of Net Investment Income		5.59	%(5)(8)		5.74	%(5)		6.37	%(5)		7.03	%(5)		5.61	%(5)		4.88	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(8)		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		36	%(7)		47	%		77	%		116	%		111	%		95	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Fixed Income Opportunities Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	8.50		$	9.65		$	9.05		$	8.51		$	9.22		$	9.39
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.23			0.50			0.59			0.62			0.49			0.45
Net Realized and Unrealized Gain (Loss)		0.65			(1.22	)		0.51			0.41			(0.72	)		(0.18	)
Total from Investment Operations		0.88			(0.72	)		1.10			1.03			(0.23	)		0.27
Distributions from and/or in Excess of:
Net Investment Income		(0.11	)		(0.43	)		(0.50	)		(0.49	)		(0.48	)		(0.44	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—
Net Asset Value, End of Period	$	9.27		$	8.50		$	9.65		$	9.05		$	8.51		$	9.22
Total Return(4)		10.35	%(7)		(7.52	)%		12.28	%		12.15	%		(2.53	)%		2.85	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	742		$	727		$	842		$	777		$	735		$	98
Ratio of Expenses Before Expense Limitation		2.17	%(8)		2.78	%		2.77	%		2.78	%		2.94	%		4.10	%
Ratio of Expenses After Expense Limitation		1.43	%(5)(8)		1.44	%(5)		1.44	%(5)		1.45	%(5)		1.45	%(5)		1.45	%(5)
Ratio of Net Investment Income		5.26	%(5)(8)		5.51	%(5)		6.11	%(5)		6.70	%(5)		5.44	%(5)		4.62	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(8)		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		36	%(7)		47	%		77	%		116	%		111	%		95	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Fixed Income Opportunities Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	8.50		$	9.65		$	9.05		$	8.52		$	9.52
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.22			0.46			0.50			0.54			0.32
Net Realized and Unrealized Gain (Loss)		0.63			(1.22	)		0.55			0.43			(0.97	)
Total from Investment Operations		0.85			(0.76	)		1.05			0.97			(0.65	)
Distributions from and/or in Excess of:
Net Investment Income		(0.11	)		(0.39	)		(0.45	)		(0.44	)		(0.35	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	9.24		$	8.50		$	9.65		$	9.05		$	8.52
Total Return(5)		10.06	%(8)		(7.98	)%		11.76	%		11.60	%		(6.95	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	499		$	48		$	284		$	225		$	202
Ratio of Expenses Before Expense Limitation		3.01	%(9)		3.79	%		3.84	%		3.97	%		6.28	%(9)
Ratio of Expenses After Expense Limitation		1.93	%(6)(9)		1.94	%(6)		1.94	%(6)		1.95	%(6)		1.95	%(6)(9)
Ratio of Net Investment Income		4.98	%(6)(9)		5.09	%(6)		5.18	%(6)		5.87	%(6)		5.34	%(6)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(9)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		36	%(8)		47	%		77	%		116	%		111	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Fixed Income Opportunities Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	8.52		$	9.68		$	9.07		$	8.53		$	9.22		$	9.40
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.27			0.56			0.65			0.67			0.50			0.51
Net Realized and Unrealized Gain (Loss)		0.64			(1.23	)		0.52			0.42			(0.66	)		(0.19	)
Total from Investment Operations		0.91			(0.67	)		1.17			1.09			(0.16	)		0.32
Distributions from and/or in Excess of:
Net Investment Income		(0.12	)		(0.49	)		(0.56	)		(0.55	)		(0.53	)		(0.50	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—
Net Asset Value, End of Period	$	9.31		$	8.52		$	9.68		$	9.07		$	8.53		$	9.22
Total Return(4)		10.74	%(7)		(6.91	)%		12.95	%		12.81	%		(1.83	)%		3.39	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	771		$	672		$	763		$	716		$	673		$	10
Ratio of Expenses Before Expense Limitation		1.63	%(8)		2.22	%		2.25	%		2.25	%		1.86	%		21.21	%
Ratio of Expenses After Expense Limitation		0.80	%(5)(8)		0.81	%(5)		0.81	%(5)		0.82	%(5)		0.82	%(5)		0.82	%(5)
Ratio of Net Investment Income		5.96	%(5)(8)		6.15	%(5)		6.74	%(5)		7.33	%(5)		5.45	%(5)		5.25	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(8)		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		36	%(7)		47	%		77	%		116	%		111	%		95	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Emerging Markets Fixed Income Opportunities Portfolio. The Fund seeks high total return.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) Certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors").

The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. 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) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (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

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	—	$	12,327		$	—	$	12,327
Sovereign		—		32,415			—		32,415
Total Fixed Income Securities		—		44,742			—		44,742
Warrant		—		1			—		1
Short-Term Investments
Investment Company		3,765		—			—		3,765
Sovereign		—		1,397			—		1,397
U.S. Treasury Security		—		30			—		30
Total Short-Term Investments		3,765		1,427			—		5,192
Foreign Currency Forward Exchange Contracts		—		7			—		7
Total Assets		3,765		46,177			—		49,942
Liabilities:
Foreign Currency Forward Exchange Contracts		—		(23	)		—		(23	)
Total	$	3,765	$	46,154		$	—	$	49,919

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of

securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

4.  Structured Investments: The Fund 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 Fund 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 Fund 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 Fund's illiquidity to the extent that the Fund, at a particular time, may be unable to find qualified buyers for these securities.

5.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund 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 may 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

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund 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 Fund as unrealized gain or loss. The Fund 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" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	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	$	7
	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	$	(23	)

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(80	)

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	17

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives(a)	Assets(a) (000)		Liabilities(a) (000)
Foreign Currency Forward Exchange Contracts	$	7	$	23

(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 Fund 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 Fund 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 potential 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 Fund 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 Fund 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 Fund's net liability may be delayed or denied.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Received (000)		Net Amount (not less than $0) (000)
BNP Paribas SA	$	1		$	—		$	—	$	1
Goldman Sachs International		3			(3	)		—		0
JPMorgan Chase Bank NA		1			—			—		1
State Street Bank and Trust Co.		2			(2	)		—		0
Total	$	7		$	(5	)	$	—	$	2
Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Pledged (000)		Net Amount (not less than $0) (000)
Bank of America NA	$	—	@	$	—		$	—	$	—	@
Citibank NA		—	@		—			—		—	@
Goldman Sachs International		3			(3	)		—		0
State Street Bank and Trust Co.		20			(2	)		—		18
Total	$	23		$	(5	)	$	—	$	18

@ Amount is less than $500.

For the six months ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	4,824,000

6.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

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

9.  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. Dividend income and other distributions are recorded on the ex-dividend date. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the 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, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.17% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.85% for Class I shares, 1.20% for Class A shares, 1.45% for Class L shares, 1.95% for Class C shares and 0.82% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $121,000

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

of advisory fees were waived and approximately $4,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

Effective August 1, 2019, the Adviser entered into a Sub-Advisory Agreement with Morgan Stanley Investment Management Limited (the "Sub-Adviser").

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.25% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining

accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $22,750,000 and $13,306,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $4,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	1,580	$	17,502	$	15,317	$	45

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	3,765

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,530	$	—	$	1,431	$	—

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 in 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 a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)		Paid-in- Capital (000)
$	5	$	(5	)

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $1,186,000 and $3,650,000, respectively, that do not have an expiration date. These amounts include capital losses acquired from MSIF Emerging Markets Domestic Debt that may be subject to limitation under IRC Section 382 in future years.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	12	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 44.6%.

K. Accounting Pronouncement: In March 2017, FASB issued an Accounting Standard Update, ASU 2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08") which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. ASU 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be accreted to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Fund has adopted ASU 2017-08 as of June 30, 2019 and is reflected in the Fund's financial statements.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the one-year period but better than 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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's contractual management fee was higher than but close to its peer group average and the actual management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

29

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

30

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

31

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

32

Morgan Stanley Institutional Fund Trust

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

33

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIEMEDSAN
2663751 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Leaders Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	9
Notes to Financial Statements	13
Investment Advisory Agreement Approval	19
Privacy Notice	21
Director and Officer Information	23

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Emerging Markets Leaders Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Emerging Markets Leaders Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Leaders Portfolio Class I	$	1,000.00	$	1,155.10	$	1,018.99	$	6.25	$	5.86		1.17	%
Emerging Markets Leaders Portfolio Class A		1,000.00		1,152.60		1,017.11		8.27		7.75		1.55
Emerging Markets Leaders Portfolio Class C		1,000.00		1,147.80		1,013.39		12.25		11.48		2.30
Emerging Markets Leaders Portfolio Class IS		1,000.00		1,155.10		1,019.34		5.88		5.51		1.10

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Emerging Markets Leaders Portfolio

	Shares		Value (000)
Common Stocks (95.6%)
Argentina (2.1%)
Despegar.com Corp. (a)		72,176	$	1,002
China (14.7%)
Alibaba Group Holding Ltd. ADR (a)		19,457		3,297
Meituan Dianping, Class B (a)(b)		58,200		511
Tencent Holdings Ltd. (b)		69,900		3,162
				6,970
Germany (5.6%)
Adidas AG		8,579		2,649
Hong Kong (5.6%)
AIA Group Ltd.		243,800		2,636
India (27.7%)
Aarti Industries Ltd.		44,585		1,149
Apollo Hospitals Enterprise Ltd.		208,554		4,107
AU Small Finance Bank Ltd.		156,700		1,599
Crompton Greaves Consumer Electricals Ltd.		450,668		1,520
IndusInd Bank Ltd.		89,393		1,828
Kotak Mahindra Bank Ltd.		113,638		2,436
Marico Ltd.		82,005		440
				13,079
Indonesia (1.0%)
Sumber Alfaria Trijaya Tbk PT		7,319,391		474
Korea, Republic of (2.5%)
Osstem Implant Co., Ltd. (a)		18,398		1,195
Peru (2.7%)
Credicorp Ltd.		5,500		1,259
Poland (2.2%)
Eurocash SA		186,747		1,031
South Africa (2.7%)
Famous Brands Ltd. (a)		210,376		1,285
Taiwan (17.5%)
King Slide Works Co., Ltd.		143,000		1,413
Poya International Co., Ltd.		88,304		1,196
Silergy Corp.		65,000		1,275
Taiwan Semiconductor Manufacturing Co., Ltd.		318,000		2,426
Voltronic Power Technology Corp. (a)		88,750		1,936
				8,246
Thailand (3.1%)
Muangthai Capital PCL (Foreign Shares)		787,900		1,453
United States (8.2%)
MercadoLibre, Inc. (a)		3,137		1,919
StoneCo Ltd., Class A (a)		32,728		968
Visa, Inc., Class A		5,805		1,008
				3,895
Total Common Stocks (Cost $35,788)				45,174

	Shares		Value (000)
Short-Term Investment (4.0%)
Investment Company (4.0%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $1,890)		1,889,559	$	1,890
Total Investments (99.6%) (Cost $37,678) (c)(d)				47,064
Other Assets in Excess of Liabilities (0.4%)				203
Net Assets (100.0%)			$	47,267

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  The approximate fair value and percentage of net assets, $34,268,000 and 72.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(d)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $10,667,000 and the aggregate gross unrealized depreciation is approximately $1,281,000, resulting in net unrealized appreciation of approximately $9,386,000.

ADR  American Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		36.0	%
Banks		15.2
Internet & Direct Marketing Retail		14.3
Health Care Providers & Services		8.7
Semiconductors & Semiconductor Equipment		7.9
Interactive Media & Services		6.7
Textiles, Apparel & Luxury Goods		5.6
Insurance		5.6
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.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Leaders Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $35,788)	$	45,174
Investment in Security of Affiliated Issuer, at Value (Cost $1,890)		1,890
Total Investments in Securities, at Value (Cost $37,678)		47,064
Foreign Currency, at Value (Cost $2)		2
Receivable for Investments Sold		125
Tax Reclaim Receivable		122
Dividends Receivable		108
Receivable from Affiliate		3
Receivable for Fund Shares Sold		—	@
Other Assets		54
Total Assets		47,478
Liabilities:
Payable for Advisory Fees		66
Deferred Capital Gain Country Tax		65
Payable for Professional Fees		56
Payable for Sub Transfer Agency Fees — Class I		5
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Custodian Fees		5
Payable for Administration Fees		3
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		1
Payable to the Advisor (Note F)		2
Other Liabilities		8
Total Liabilities		211
Net Assets	$	47,267
Net Assets Consist of:
Paid-in-Capital	$	36,798
Total Distributable Earnings		10,469
Net Assets	$	47,267

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Leaders Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	30,533
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,547,224
Net Asset Value, Offering and Redemption Price Per Share	$	11.99
CLASS A:
Net Assets	$	1,053
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		88,798
Net Asset Value, Redemption Price Per Share	$	11.86
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.66
Maximum Offering Price Per Share	$	12.52
CLASS C:
Net Assets	$	920
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		79,519
Net Asset Value, Offering and Redemption Price Per Share	$	11.57
CLASS IS:
Net Assets	$	14,761
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,231,150
Net Asset Value, Offering and Redemption Price Per Share	$	11.99

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Leaders Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $43 of Foreign Taxes Withheld)	$	279
Dividends from Security of Affiliated Issuer (Note G)		17
Total Investment Income		296
Expenses:
Advisory Fees (Note B)		228
Professional Fees		51
Registration Fees		27
Custodian Fees (Note F)		26
Administration Fees (Note C)		20
Sub Transfer Agency Fees — Class I		12
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class C		—	@
Shareholder Reporting Fees		7
Shareholder Services Fees — Class A (Note D)		1
Distribution and Shareholder Services Fees — Class C (Note D)		4
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		3
Pricing Fees		1
Other Expenses		5
Expenses Before Non Operating Expenses		389
Bank Overdraft Expense		5
Total Expenses		394
Waiver of Advisory Fees (Note B)		(90	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		302
Net Investment Loss		(6	)
Realized Gain (Loss):
Investments Sold		1,628
Foreign Currency Translation		(31	)
Net Realized Gain		1,597
Change in Unrealized Appreciation (Depreciation):
Investments (Net Decrease in Deferred Capital Gain Country Tax of $51)		5,959
Foreign Currency Translation		1
Net Change in Unrealized Appreciation (Depreciation)		5,960
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		7,557
Net Increase in Net Assets Resulting from Operations	$	7,551

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Emerging Markets Leaders Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	(6	)	$	195
Net Realized Gain		1,597			1,109
Net Change in Unrealized Appreciation (Depreciation)		5,960			(10,902	)
Net Increase (Decrease) in Net Assets Resulting from Operations		7,551			(9,598	)
Dividends and Distributions to Shareholders:
Class I		—			(189	)
Class A		—			(4	)
Class C		—			(3	)
Class IS		—			(72	)
Total Dividends and Distributions to Shareholders		—			(268	)
Capital Share Transactions:(1)
Class I:
Subscribed		7,938			8,770
Distributions Reinvested		—			153
Redeemed		(21,915	)		(35,622	)
Class A:
Subscribed		28			387
Distributions Reinvested		—			4
Redeemed		(145	)		(270	)
Class C:
Subscribed		62			314
Distributions Reinvested		—			3
Redeemed		(41	)		(325	)
Class IS:
Distributions Reinvested		—			72
Net Decrease in Net Assets Resulting from Capital Share Transactions		(14,073	)		(26,514	)
Redemption Fees		—	@		—	@
Total Decrease in Net Assets		(6,522	)		(36,380	)
Net Assets:
Beginning of Period		53,789			90,169
End of Period	$	47,267		$	53,789
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		719			757
Shares Issued on Distributions Reinvested		—			14
Shares Redeemed		(1,948	)		(3,029	)
Net Decrease in Class I Shares Outstanding		(1,229	)		(2,258	)
Class A:
Shares Subscribed		2			32
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(13	)		(24	)
Net Increase (Decrease) in Class A Shares Outstanding		(11	)		8
Class C:
Shares Subscribed		6			29
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(4	)		(29	)
Net Increase in Class C Shares Outstanding		2			—	@@
Class IS:
Shares Issued on Distributions Reinvested		—			7

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Leaders Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from January 5, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	10.38		$	12.14		$	9.73		$	9.45		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.00	)(4)		0.03			0.08			0.04			0.06
Net Realized and Unrealized Gain (Loss)		1.61			(1.74	)		2.45			0.25			(0.49	)
Total from Investment Operations		1.61			(1.71	)		2.53			0.29			(0.43	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.01	)		(0.08	)		(0.01	)		(0.12	)
Net Realized Gain		—			(0.04	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			(0.00	)(4)		—
Total Distributions		—			(0.05	)		(0.12	)		(0.01	)		(0.12	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		—
Net Asset Value, End of Period	$	11.99		$	10.38		$	12.14		$	9.73		$	9.45
Total Return(5)		15.51	%(8)		(14.12	)%		26.01	%		3.08	%		(4.26	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	30,533		$	39,206		$	73,273		$	25,374		$	13,379
Ratio of Expenses Before Expense Limitation		1.53	%(9)		1.48	%		1.43	%		1.32	%		2.80	%(9)
Ratio of Expenses After Expense Limitation		1.19	%(6)(9)		1.17	%(6)		1.11	%(6)		1.10	%(6)		1.14	%(6)(9)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.17	%(6)(9)		1.16	%(6)		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.10	)%(6)(9)		0.29	%(6)		0.67	%(6)		0.37	%(6)		0.65	%(6)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.01	%		0.01	%		0.02	%		0.01	%(9)
Portfolio Turnover Rate		28	%(8)		47	%		79	%		45	%		36	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Date of Reorganization (close of business).

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Leaders Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from January 5, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	10.29		$	12.06		$	9.67		$	9.43		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		(0.02	)		(0.00	)(4)		0.02			(0.03	)		0.02
Net Realized and Unrealized Gain (Loss)		1.59			(1.73	)		2.44			0.28			(0.48	)
Total from Investment Operations		1.57			(1.73	)		2.46			0.25			(0.46	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.03	)		(0.01	)		(0.11	)
Net Realized Gain		—			(0.04	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			(0.00	)(4)		—
Total Distributions		—			(0.04	)		(0.07	)		(0.01	)		(0.11	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		—
Net Asset Value, End of Period	$	11.86		$	10.29		$	12.06		$	9.67		$	9.43
Total Return(5)		15.26	%(9)		(14.41	)%		25.46	%		2.63	%		(4.61	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,053		$	1,024		$	1,102		$	821		$	182
Ratio of Expenses Before Expense Limitation		1.96	%(10)		1.93	%		2.01	%		1.96	%		5.89	%(10)
Ratio of Expenses After Expense Limitation		1.57	%(6)(8)(10)		1.55	%(6)		1.54	%(6)		1.53	%(6)		1.54	%(6)(10)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.55	%(6)(10)		1.54	%(6)		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.30	)%(6)(10)		(0.04	)%(6)		0.18	%(6)		(0.33	)%(6)		0.21	%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(10)		0.01	%		0.01	%		0.02	%		0.01	%(10)
Portfolio Turnover Rate		28	%(9)		47	%		79	%		45	%		36	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Date of Reorganization (close of business).

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Amount is less than 0.005%.

(8)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Leaders Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	10.08		$	11.90		$	9.59		$	9.42		$	10.61
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.05	)		(0.09	)		(0.06	)		(0.10	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		1.54			(1.69	)		2.41			0.28			(1.07	)
Total from Investment Operations		1.49			(1.78	)		2.35			0.18			(1.13	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.01	)		(0.06	)
Net Realized Gain		—			(0.04	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			(0.00	)(4)		—
Total Distributions		—			(0.04	)		(0.04	)		(0.01	)		(0.06	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		—
Net Asset Value, End of Period	$	11.57		$	10.08		$	11.90		$	9.59		$	9.42
Total Return(5)		14.78	%(9)		(15.02	)%		24.53	%		1.89	%		(10.61	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	920		$	780		$	926		$	587		$	100
Ratio of Expenses Before Expense Limitation		2.73	%(10)		2.75	%		2.80	%		3.08	%		5.73	%(10)
Ratio of Expenses After Expense Limitation		2.32	%(6)(8)(10)		2.30	%(6)		2.29	%(6)		2.28	%(6)		2.30	%(6)(10)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		2.30	%(6)(10)		2.29	%(6)		N/A			N/A			N/A
Ratio of Net Investment Loss		(1.02	)%(6)(10)		(0.83	)%(6)		(0.49	)%(6)		(0.99	)%(6)		(0.85	)%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(10)		0.01	%		0.01	%		0.02	%		0.00	%(7)(10)
Portfolio Turnover Rate		28	%(9)		47	%		79	%		45	%		36	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(7)  Amount is less than 0.005%.

(8)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Leaders Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from January 5, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	10.38		$	12.14		$	9.73		$	9.45		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		0.01			0.04			0.08			(0.00	)(4)		0.07
Net Realized and Unrealized Gain (Loss)		1.60			(1.74	)		2.45			0.29			(0.50	)
Total from Investment Operations		1.61			(1.70	)		2.53			0.29			(0.43	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.02	)		(0.08	)		(0.01	)		(0.12	)
Net Realized Gain		—			(0.04	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			(0.00	)(4)		—
Total Distributions		—			(0.06	)		(0.12	)		(0.01	)		(0.12	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		—
Net Asset Value, End of Period	$	11.99		$	10.38		$	12.14		$	9.73		$	9.45
Total Return(5)		15.51	%(10)		(14.03	)%		26.02	%		3.09	%		(4.25	)%(10)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14,761		$	12,779		$	14,868		$	88,880		$	15,925
Ratio of Expenses Before Expense Limitation		1.46	%(11)		1.44	%		1.42	%		1.31	%		2.65	%(11)
Ratio of Expenses After Expense Limitation		1.12	%(6)(9)(11)		1.10	%(6)		1.09	%(6)		1.08	%(6)		1.12	%(6)(7)(11)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.10	%(6)(11)		1.09	%(6)		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		0.23	%(6)(11)		0.38	%(6)		0.72	%(6)		(0.00	)%(6)(8)		0.75	%(6)(11)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(8)(11)		0.01	%		0.01	%		0.02	%		0.01	%(11)
Portfolio Turnover Rate		28	%(10)		47	%		79	%		45	%		36	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Date of Reorganization (close of business).

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.10% for Class IS shares. Prior to September 30, 2015, the maximum ratio was 1.15% for Class IS shares.

(8)  Amount is less than 0.005%.

(9)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(10)  Not annualized.

(11)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Emerging Markets Leaders Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued

at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Company ("MSIM Company") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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
Banks	$	1,259	$	5,863	$	—	$	7,122
Chemicals		—		1,149		—		1,149
Consumer Finance		—		1,453		—		1,453
Electrical Equipment		—		1,936		—		1,936
Food & Staples Retailing		—		1,505		—		1,505
Health Care Equipment & Supplies		—		1,195		—		1,195
Health Care Providers & Services		—		4,107		—		4,107
Hotels, Restaurants & Leisure		—		1,285		—		1,285
Household Durables		—		1,520		—		1,520
Information Technology Services		1,976		—		—		1,976
Insurance		—		2,636		—		2,636
Interactive Media & Services		—		3,162		—		3,162
Internet & Direct Marketing Retail		6,218		511		—		6,729
Machinery		—		1,413		—		1,413
Multi-Line Retail		—		1,196		—		1,196
Personal Products		—		440		—		440
Semiconductors & Semiconductor Equipment		—		3,701		—		3,701
Textiles, Apparel & Luxury Goods		—		2,649		—		2,649
Total Common Stocks		9,453		35,721		—		45,174
Short-Term Investment
Investment Company		1,890		—		—		1,890
Total Assets	$	11,343	$	35,721	$	—	$	47,064

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

6.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income,

expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $1 billion			Over $1 billion
	0.90	%		0.85	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.54% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that 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 I shares, 1.55% for Class A shares, 2.30% for Class C shares and 1.10% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $90,000 of advisory fees were waived and approximately $1,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

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

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other

than long-term U.S. Government securities and short-term investments were approximately $13,650,000 and $28,091,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	1,782	$	17,563	$	17,455	$	17

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	1,890

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	61	$	207	$	555	$	310

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 in 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 a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	1	$	(1	)

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	—	$	800

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	13	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Company had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Company. The aggregate percentage of such owners was 74.0%.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator 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 considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the three- and five-year periods but better than 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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's contractual management fee was higher than its peer group average and its actual management fee and total expense ratio were higher than but close to its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

20

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

21

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

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

Sub-Adviser

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

23

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIEMLSAN
2663760 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	7
Statement of Operations	9
Statements of Changes in Net Assets	10
Financial Highlights	12
Notes to Financial Statements	18
Investment Advisory Agreement Approval	29
Privacy Notice	31
Director and Officer Information	33

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Emerging Markets Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Emerging Markets Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Portfolio Class I	$	1,000.00	$	1,098.50	$	1,019.69	$	5.36	$	5.16		1.03	%
Emerging Markets Portfolio Class A		1,000.00		1,096.40		1,018.00		7.12		6.85		1.37
Emerging Markets Portfolio Class L		1,000.00		1,093.30		1,015.42		9.81		9.44		1.89
Emerging Markets Portfolio Class C		1,000.00		1,092.70		1,014.18		11.10		10.69		2.14
Emerging Markets Portfolio Class IS		1,000.00		1,099.00		1,020.13		4.89		4.71		0.94
Emerging Markets Portfolio Class IR		1,000.00		1,098.50		1,020.13		4.89		4.71		0.94

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Emerging Markets Portfolio

	Shares		Value (000)
Common Stocks (97.1%)
Argentina (0.7%)
Grupo Financiero Galicia SA ADR		150,752	$	5,352
Brazil (9.7%)
Ambev SA		2,575,820		12,000
Atacadao SA		1,583,501		9,072
B3 SA - Brasil Bolsa Balcao		1,086,894		10,603
Banco Bradesco SA (Preference)		733,293		7,207
Itau Unibanco Holding SA (Preference)		1,443,913		13,635
Lojas Renner SA		762,176		9,361
Petroleo Brasileiro SA		1,122,791		8,778
Petroleo Brasileiro SA (Preference)		1,265,881		9,036
				79,692
Chile (1.0%)
SACI Falabella		1,204,376		7,865
China (26.2%)
Alibaba Group Holding Ltd. ADR (a)		170,871		28,954
Anhui Conch Cement Co., Ltd., Class A		1,108,867		6,717
Baidu, Inc. ADR (a)		26,148		3,069
Bank of China Ltd. H Shares (b)		34,471,000		14,531
China Construction Bank Corp. H Shares (b)		17,468,120		15,011
China International Capital Corp. Ltd. H Shares (b)(c)		1,364,000		2,756
China Life Insurance Co., Ltd. H Shares (b)		3,018,000		7,400
China Mengniu Dairy Co., Ltd. (a)(b)		2,197,000		8,512
China Mobile Ltd. (b)		659,280		6,001
China Overseas Land & Investment Ltd. (b)		1,622,000		5,985
China Resources Beer Holdings Co., Ltd. (b)		1,374,000		6,503
China Resources Land Ltd. (b)		916,000		4,018
China Unicom Hong Kong Ltd. (b)		4,062,000		4,464
CSPC Pharmaceutical Group Ltd. (b)		2,210,000		3,549
Kweichow Moutai Co., Ltd., Class A		59,862		8,588
New Oriental Education & Technology Group, Inc. ADR (a)		72,253		6,978
PetroChina Co., Ltd. H Shares (b)		7,916,000		4,355
Pinduoduo, Inc. ADR (a)(c)		132,100		2,725
Ping An Insurance Group Co. of China Ltd., Class A		497,696		6,437
Ping An Insurance Group Co. of China Ltd. H Shares (b)		272,000		3,274
Shanghai Pharmaceuticals Holding Co., Ltd. H Shares (b)		986,700		1,941
Shenzhou International Group Holdings Ltd. (b)		738,800		10,121
Sino Biopharmaceutical Ltd. (b)		3,803,000		3,900
Sinopharm Group Co., Ltd. H Shares (b)		502,000		1,769
TAL Education Group ADR (a)		101,942		3,884
Tencent Holdings Ltd. (b)		873,900		39,536
Universal Scientific Industrial Shanghai Co. Ltd., Class A		1,644,289		2,889
Yihai International Holding Ltd. (a)(b)		237,000		1,232
				215,099

	Shares		Value (000)
Egypt (0.8%)
Commercial International Bank Egypt SAE		1,562,426	$	6,832
Germany (0.9%)
Adidas AG		24,147		7,455
Hong Kong (0.1%)
Frontage Holdings Corp. (a)		1,098,000		439
Hungary (2.0%)
OTP Bank Nyrt		261,195		10,391
Richter Gedeon Nyrt		320,832		5,911
				16,302
India (9.3%)
Ashok Leyland Ltd.		5,065,802		6,403
Axis Bank Ltd. (a)		389,979		4,579
Eicher Motors Ltd.		16,192		4,500
HDFC Bank Ltd. ADR		30,500		3,966
Housing Development Finance Corp., Ltd.		152,773		4,852
ICICI Bank Ltd.		1,512,461		9,594
ICICI Bank Ltd. ADR		146,900		1,850
ICICI Prudential Life Insurance Co. Ltd.		855,849		4,832
IndusInd Bank Ltd.		304,238		6,223
L&T Finance Holdings Ltd.		1,573,947		2,626
Larsen & Toubro Ltd.		317,908		7,155
Marico Ltd.		680,325		3,653
Shree Cement Ltd.		27,110		8,571
Tata Consultancy Services Ltd.		223,112		7,200
				76,004
Indonesia (5.4%)
Astra International Tbk PT		11,812,300		6,231
Bank Central Asia Tbk PT		7,604,100		16,148
Bank Mandiri Persero Tbk PT		5,960,200		3,390
Bank Rakyat Indonesia Persero Tbk PT		26,937,750		8,316
Telekomunikasi Indonesia Persero Tbk PT		23,427,200		6,879
Unilever Indonesia Tbk PT		1,042,200		3,320
				44,284
Korea, Republic of (3.9%)
E-MART, Inc.		11,834		1,436
GS Retail Co., Ltd.		49,944		1,700
LG Household & Health Care Ltd.		4,470		5,087
NCSoft Corp.		4,956		2,047
S-Oil Corp.		34,246		2,482
Samsung Biologics Co. Ltd. (a)(c)		13,397		3,717
Samsung Electronics Co., Ltd.		390,058		15,903
				32,372
Malaysia (1.4%)
Malayan Banking Bhd		2,047,329		4,401
Public Bank Bhd		1,241,400		6,911
				11,312

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Portfolio

	Shares		Value (000)
Mexico (5.4%)
Alsea SAB de CV (a)		1,755,609	$	3,467
Fomento Economico Mexicano SAB de CV ADR		122,575		11,859
Grupo Financiero Banorte SAB de CV Series O		2,322,793		13,491
Infraestructura Energetica Nova SAB de CV		1,474,966		5,804
Wal-Mart de Mexico SAB de CV		3,682,771		10,052
				44,673
Peru (2.5%)
Cia de Minas Buenaventura SAA ADR		693,233		11,556
Credicorp Ltd.		37,815		8,656
				20,212
Philippines (1.4%)
Ayala Corp.		165,520		2,889
Ayala Land, Inc.		2,567,500		2,547
Jollibee Foods Corp.		355,520		1,956
SM Investments Corp.		225,300		4,261
				11,653
Poland (3.4%)
Jeronimo Martins SGPS SA		763,904		12,302
LPP SA		3,134		6,414
Santander Bank Polska SA		95,334		9,470
				28,186
Russia (5.1%)
MMC Norilsk Nickel PJSC ADR (OTCBB)		26,330		593
MMC Norilsk Nickel PJSC ADR (XLON)		372,550		8,459
Sberbank of Russia PJSC ADR		773,715		11,901
X5 Retail Group N.V. GDR		325,860		11,174
Yandex N.V., Class A (a)		255,995		9,728
				41,855
South Africa (5.8%)
AVI Ltd.		871,915		5,655
Bidvest Group Ltd. (The)		486,982		6,548
Capitec Bank Holdings Ltd.		88,559		8,167
Clicks Group Ltd. (c)		472,842		6,893
Nedbank Group Ltd.		398,549		7,175
Reunert Ltd.		704,583		3,383
Sanlam Ltd.		1,791,616		9,955
				47,776
Taiwan (8.4%)
ASE Technology Holding Co., Ltd.		1,615,626		3,182
Cathay Financial Holding Co., Ltd. (a)		2,590,000		3,574
CTBC Financial Holding Co., Ltd.		7,938,000		5,462
Eclat Textile Co., Ltd.		207,000		2,661
Hon Hai Precision Industry Co., Ltd.		705,360		1,760
Largan Precision Co., Ltd.		14,000		1,741
MediaTek, Inc.		501,000		5,080
Mega Financial Holding Co. Ltd.		4,970,000		4,938
Nanya Technology Corp.		571,000		1,186
President Chain Store Corp.		95,000		919
Taiwan Cement Corp.		1,037,000		1,538

	Shares		Value (000)
Taiwan Semiconductor Manufacturing Co., Ltd.		4,533,205	$	34,582
Vanguard International Semiconductor Corp.		1,182,000		2,487
				69,110
Thailand (2.1%)
Bangkok Dusit Medical Services PCL (Foreign Shares)		5,075,400		4,307
CP ALL PCL (Foreign Shares)		1,199,200		3,363
Muangthai Capital PCL (Foreign Shares)		1,285,400		2,370
PTT PCL (Foreign Shares)		4,247,600		6,756
				16,796
Turkey (1.6%)
Haci Omer Sabanci Holding AS		4,795,087		7,114
Tupras Turkiye Petrol Rafinerileri AS		295,793		5,875
				12,989
Total Common Stocks (Cost $670,279)				796,258
Short-Term Investments (4.3%)
Securities held as Collateral on Loaned Securities (1.6%)
Investment Company (1.6%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $12,577)		12,577,094		12,577
Investment Company (2.7%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $22,509)		22,508,992		22,509
Total Short-Term Investments (Cost $35,086)				35,086
Total Investments (101.4%) (Cost $705,365) Including $14,767 of Securities Loaned (d)(e)(f)				831,344
Liabilities in Excess of Other Assets (–1.4%)				(11,116	)
Net Assets (100.0%)			$	820,228

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  All or a portion of this security was on loan at June 30, 2019.

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

(e)  The approximate fair value and percentage of net assets, $559,482,000 and 68.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $145,526,000 and the aggregate gross unrealized depreciation is approximately $20,032,000, resulting in net unrealized appreciation of approximately $125,494,000.

ADR  American Depositary Receipt.

GDR  Global Depositary Receipt.

OTCBB  OTC Bulletin Board.

PJSC  Public Joint Stock Company.

XLON  London Stock Exchange.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Portfolio

Foreign Currency Forward Exchange Contract:

The Fund had the following foreign currency forward exchange contract open at June 30, 2019:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Depreciation (000)
Goldman Sachs International	HKD	988,255	$	126,050	8/16/19	$	(485	)

HKD  —  Hong Kong Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		55.6	%
Banks		25.4
Food & Staples Retailing		6.9
Interactive Media & Services		6.4
Semiconductors & Semiconductor Equipment		5.7
Total Investments		100.0	%***

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2019.

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

***  Does not include open foreign currency forward exchange contract with unrealized depreciation of approximately $485,000.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $670,279)	$	796,258
Investment in Security of Affiliated Issuer, at Value (Cost $35,086)		35,086
Total Investments in Securities, at Value (Cost $705,365)		831,344
Foreign Currency, at Value (Cost $1,013)		1,020
Cash		27
Dividends Receivable		3,511
Receivable for Fund Shares Sold		551
Tax Reclaim Receivable		257
Receivable for Investments Sold		157
Receivable from Affiliate		25
Due from Broker		5
Receivable from Securities Lending Income		4
Other Assets		934
Total Assets		837,835
Liabilities:
Collateral on Securities Loaned, at Value		12,577
Deferred Capital Gain Country Tax		1,401
Payable for Advisory Fees		1,282
Unrealized Depreciation on Foreign Currency Forward Exchange Contract		485
Payable for Fund Shares Redeemed		249
Payable for Reorganization Expense		218
Payable for Professional Fees		176
Payable for Investments Purchased		146
Payable for Custodian Fees		133
Payable for Sub Transfer Agency Fees — Class I		47
Payable for Sub Transfer Agency Fees — Class A		4
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		41
Payable for Shareholder Services Fees — Class A		3
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Transfer Agency Fees — Class IR		—	@
Other Liabilities		844
Total Liabilities		17,607
Net Assets	$	820,228
Net Assets Consist of:
Paid-in-Capital	$	585,431
Total Distributable Earnings		234,797
Net Assets	$	820,228

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	319,129
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		12,891,173
Net Asset Value, Offering and Redemption Price Per Share	$	24.76
CLASS A:
Net Assets	$	14,386
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		596,410
Net Asset Value, Redemption Price Per Share	$	24.12
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.34
Maximum Offering Price Per Share	$	25.46
CLASS L:
Net Assets	$	319
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		13,472
Net Asset Value, Offering and Redemption Price Per Share	$	23.67
CLASS C:
Net Assets	$	438
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		18,564
Net Asset Value, Offering and Redemption Price Per Share	$	23.58
CLASS IS:
Net Assets	$	485,947
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		19,624,481
Net Asset Value, Offering and Redemption Price Per Share	$	24.76
CLASS IR:
Net Assets	$	9
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		381
Net Asset Value, Offering and Redemption Price Per Share	$	24.76
(1)Including: Securities on Loan, at Value:	$	14,767

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1,889 of Foreign Taxes Withheld)	$	14,146
Dividends from Security of Affiliated Issuer (Note G)		347
Income from Securities Loaned — Net		39
Total Investment Income		14,532
Expenses:
Advisory Fees (Note B)		3,793
Excise Tax		440
Administration Fees (Note C)		379
Custodian Fees (Note F)		305
Sub Transfer Agency Fees — Class I		146
Sub Transfer Agency Fees — Class A		10
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Professional Fees		63
Registration Fees		39
Shareholder Reporting Fees		25
Shareholder Services Fees — Class A (Note D)		18
Distribution and Shareholder Services Fees — Class L (Note D)		1
Distribution and Shareholder Services Fees — Class C (Note D)		2
Directors' Fees and Expenses		16
Transfer Agency Fees — Class I (Note E)		8
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Transfer Agency Fees — Class IR (Note E)		1
Pricing Fees		4
Other Expenses		28
Expenses Before Non Operating Expenses		5,283
Bank Overdraft Expense		15
Total Expenses		5,298
Waiver of Advisory Fees (Note B)		(590	)
Rebate from Morgan Stanley Affiliate (Note G)		(25	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(1	)
Net Expenses		4,679
Net Investment Income		9,853
Realized Gain (Loss):
Investments Sold (Net of $116 of Capital Gain Country Tax)		103,502
Foreign Currency Forward Exchange Contracts		(2,854	)
Foreign Currency Translation		(478	)
Futures Contracts		4,890
Net Realized Gain		105,060
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $835)		(24,250	)
Foreign Currency Forward Exchange Contracts		1,285
Foreign Currency Translation		2
Futures Contracts		363
Net Change in Unrealized Appreciation (Depreciation)		(22,600	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		82,460
Net Increase in Net Assets Resulting from Operations	$	92,313

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Emerging Markets Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	9,853		$	15,055
Net Realized Gain		105,060			49,116
Net Change in Unrealized Appreciation (Depreciation)		(22,600	)		(303,741	)
Net Increase (Decrease) in Net Assets Resulting from Operations		92,313			(239,570	)
Dividends and Distributions to Shareholders:
Class I		—			(5,586	)
Class A		—			(266	)
Class L		—			(3	)
Class C		—			(3	)
Class IS		—			(20,307	)
Class IR		—			(—	@)(a)
Total Dividends and Distributions to Shareholders		—			(26,165	)
Capital Share Transactions:(1)
Class I:
Subscribed		17,747			60,621
Issued due to a Tax-free Reorganization		438,765			—
Distributions Reinvested		—			5,497
Redeemed		(384,447	)		(120,158	)
Class A:
Subscribed		1,752			7,227
Distributions Reinvested		—			258
Redeemed		(2,265	)		(13,497	)
Class L:
Exchanged		—			118
Distributions Reinvested		—			3
Redeemed		—			(33	)
Class C:
Subscribed		105			96
Distributions Reinvested		—			3
Redeemed		(6	)		(500	)
Class IS:
Subscribed		62,371			135,108
Distributions Reinvested		—			18,614
Redeemed		(446,494	)		(189,029	)
Class IR:
Subscribed		—			10	(a)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(312,472	)		(95,662	)
Redemption Fees		11			3
Total Decrease in Net Assets		(220,148	)		(361,394	)
Net Assets:
Beginning of Period		1,040,376			1,401,770
End of Period	$	820,228		$	1,040,376

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Emerging Markets Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		741			2,291
Shares Issued due to a Tax-free Reorganization		17,868			—
Shares Issued on Distributions Reinvested		—			246
Shares Redeemed		(15,889	)		(4,615	)
Net Increase (Decrease) in Class I Shares Outstanding		2,720			(2,078	)
Class A:
Shares Subscribed		74			277
Shares Issued on Distributions Reinvested		—			12
Shares Redeemed		(96	)		(549	)
Net Decrease in Class A Shares Outstanding		(22	)		(260	)
Class L:
Shares Exchanged		—			5
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		—			(1	)
Net Increase in Class L Shares Outstanding		—			4
Class C:
Shares Subscribed		4			4
Shares Redeemed		(—	@@)		(20	)
Net Increase (Decrease) in Class C Shares Outstanding		4			(16	)
Class IS:
Shares Subscribed		2,626			4,875
Shares Issued on Distributions Reinvested		—			834
Shares Redeemed		(18,389	)		(7,321	)
Net Decrease in Class IS Shares Outstanding		(15,763	)		(1,612	)
Class IR:
Shares Subscribed		—			—	@@(a)

(a)  For the period June 15, 2018 through December 31, 2018.

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	22.53		$	27.95		$	20.83		$	19.68		$	22.13		$	24.64
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.28			0.28			0.19			0.17			0.15			0.17
Net Realized and Unrealized Gain (Loss)		1.95			(5.15	)		7.10			1.15			(2.43	)		(1.30	)
Total from Investment Operations		2.23			(4.87	)		7.29			1.32			(2.28	)		(1.13	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.35	)		(0.17	)		(0.17	)		(0.17	)		(0.20	)
Net Realized Gain		—			(0.20	)		—			—			—			(1.18	)
Total Distributions		—			(0.55	)		(0.17	)		(0.17	)		(0.17	)		(1.38	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	24.76		$	22.53		$	27.95		$	20.83		$	19.68		$	22.13
Total Return(4)		9.85	%(9)		(17.32	)%		34.97	%		6.73	%		(10.33	)%		(4.47	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	319,129		$	229,132		$	342,400		$	282,674		$	531,194		$	644,537
Ratio of Expenses Before Expense Limitation		1.16	%(10)		N/A			1.07	%		1.16	%		1.45	%		1.52	%
Ratio of Expenses After Expense Limitation		1.03	%(5)(10)		1.03	%(5)		1.04	%(5)		1.11	%(5)(7)		1.24	%(5)(6)		1.25	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.03	%(5)(10)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income		2.34	%(5)(10)		1.08	%(5)		0.75	%(5)		0.83	%(5)		0.68	%(5)		0.68	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(10)		0.01	%		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)
Portfolio Turnover Rate		41	%(9)		56	%		35	%		33	%		40	%		43	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.20% for Class I shares. Prior to September 30, 2015, the maximum ratio was 1.25% for Class I shares.

(7)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.05% for Class I shares. Prior to September 30, 2016, the maximum ratio was 1.20% for Class I shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	21.99		$	27.24		$	20.31		$	19.19		$	21.57		$	24.02
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.22			0.20			0.10			0.11			0.07			0.11
Net Realized and Unrealized Gain (Loss)		1.91			(5.01	)		6.92			1.11			(2.36	)		(1.28	)
Total from Investment Operations		2.13			(4.81	)		7.02			1.22			(2.29	)		(1.17	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.24	)		(0.09	)		(0.10	)		(0.09	)		(0.10	)
Net Realized Gain		—			(0.20	)		—			—			—			(1.18	)
Total Distributions		—			(0.44	)		(0.09	)		(0.10	)		(0.09	)		(1.28	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	24.12		$	21.99		$	27.24		$	20.31		$	19.19		$	21.57
Total Return(4)		9.64	%(9)		(17.58	)%		34.54	%		6.37	%		(10.63	)%		(4.77	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14,386		$	13,605		$	23,952		$	18,824		$	19,065		$	26,701
Ratio of Expenses Before Expense Limitation		1.50	%(10)		N/A			1.40	%		1.48	%		1.76	%		1.82	%
Ratio of Expenses After Expense Limitation		1.37	%(5)(10)		1.34	%(5)		1.36	%(5)		1.45	%(5)(7)		1.56	%(5)(6)		1.57	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.37	%(5)(10)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income		1.91	%(5)(10)		0.78	%(5)		0.42	%(5)		0.55	%(5)		0.34	%(5)		0.45	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(10)		0.01	%		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)
Portfolio Turnover Rate		41	%(9)		56	%		35	%		33	%		40	%		43	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.55% for Class A shares. Prior to September 30, 2015, the maximum ratio was 1.60% for Class A shares.

(7)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.40% for Class A shares. Prior to September 30, 2016, the maximum ratio was 1.55% for Class A shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	21.64		$	26.85		$	20.08		$	18.98		$	21.39		$	23.91
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.16			0.05			(0.01	)		0.00	(3)		(0.04	)		(0.05	)
Net Realized and Unrealized Gain (Loss)		1.87			(4.91	)		6.80			1.10			(2.33	)		(1.23	)
Total from Investment Operations		2.03			(4.86	)		6.79			1.10			(2.37	)		(1.28	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.15	)		(0.02	)		—			(0.04	)		(0.06	)
Net Realized Gain		—			(0.20	)		—			—			—			(1.18	)
Total Distributions		—			(0.35	)		(0.02	)		—			(0.04	)		(1.24	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	23.67		$	21.64		$	26.85		$	20.08		$	18.98		$	21.39
Total Return(4)		9.33	%(9)		(18.03	)%		33.80	%		5.80	%		(11.11	)%		(5.26	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	319		$	292		$	253		$	239		$	226		$	210
Ratio of Expenses Before Expense Limitation		2.37	%(10)		2.55	%		2.54	%		2.69	%		2.78	%		2.97	%
Ratio of Expenses After Expense Limitation		1.89	%(5)(10)		1.89	%(5)		1.90	%(5)		2.01	%(5)(7)		2.09	%(5)(6)		2.10	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.89	%(5)(10)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		1.39	%(5)(10)		0.20	%(5)		(0.03	)%(5)		0.00	%(5)(8)		(0.19	)%(5)		(0.21	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(10)		0.01	%		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)
Portfolio Turnover Rate		41	%(9)		56	%		35	%		33	%		40	%		43	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.05% for Class L shares. Prior to September 30, 2015, the maximum ratio was 2.10% for Class L shares.

(7)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.90% for Class L shares. Prior to September 30, 2016, the maximum ratio was 2.05% for Class L shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	21.57		$	26.66		$	19.99		$	18.95		$	23.16
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		0.14			0.04			(0.09	)		(0.04	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		1.87			(4.93	)		6.78			1.09			(4.14	)
Total from Investment Operations		2.01			(4.89	)		6.69			1.05			(4.17	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.00	)(4)		(0.02	)		(0.01	)		(0.04	)
Net Realized Gain		—			(0.20	)		—			—			—
Total Distributions		—			(0.20	)		(0.02	)		(0.01	)		(0.04	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	23.58		$	21.57		$	26.66		$	19.99		$	18.95
Total Return(5)		9.27	%(10)		(18.26	)%		33.45	%		5.56	%		(18.03	)%(10)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	438		$	309		$	817		$	608		$	10
Ratio of Expenses Before Expense Limitation		2.56	%(11)		2.37	%		2.30	%		2.58	%		22.89	%(11)
Ratio of Expenses After Expense Limitation		2.14	%(6)(11)		2.14	%(6)		2.15	%(6)		2.24	%(6)(8)		2.33	%(6)(7)(11)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		2.14	%(6)(11)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		1.26	%(6)(11)		0.17	%(6)		(0.36	)%(6)		(0.19	)%(6)		(0.23	)%(6)(11)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(11)		0.01	%		0.00	%(9)		0.00	%(9)		0.00	%(9)(11)
Portfolio Turnover Rate		41	%(10)		56	%		35	%		33	%		40	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.30% for Class C shares. Prior to September 30, 2015, the maximum ratio was 2.35% for Class C shares.

(8)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.15% for Class C shares. Prior to September 30, 2016, the maximum ratio was 2.30% for Class C shares.

(9)  Amount is less than 0.005%.

(10)  Not annualized.

(11)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	22.52		$	27.96		$	20.83		$	19.68		$	22.14		$	24.64
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.23			0.31			0.21			0.21			0.17			0.22
Net Realized and Unrealized Gain (Loss)		2.01			(5.17	)		7.11			1.12			(2.44	)		(1.32	)
Total from Investment Operations		2.24			(4.86	)		7.32			1.33			(2.27	)		(1.10	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.38	)		(0.19	)		(0.18	)		(0.19	)		(0.22	)
Net Realized Gain		—			(0.20	)		—			—			—			(1.18	)
Total Distributions		—			(0.58	)		(0.19	)		(0.18	)		(0.19	)		(1.40	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	24.76		$	22.52		$	27.96		$	20.83		$	19.68		$	22.14
Total Return(4)		9.90	%(9)		(17.25	)%		35.09	%		6.79	%		(10.29	)%		(4.36	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	485,947		$	797,029		$	1,034,348		$	657,106		$	297,469		$	325,029
Ratio of Expenses Before Expense Limitation		1.07	%(10)		N/A			0.98	%		1.07	%		1.35	%		1.42	%
Ratio of Expenses After Expense Limitation		0.94	%(5)(10)		0.92	%(5)		0.95	%(5)		1.04	%(5)(7)		1.16	%(5)(6)		1.18	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.94	%(5)(10)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income		1.91	%(5)(10)		1.21	%(5)		0.82	%(5)		0.99	%(5)		0.75	%(5)		0.89	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(10)		0.01	%		0.00	%(8)		0.00	%(8)		0.00	%(8)		0.00	%(8)
Portfolio Turnover Rate		41	%(9)		56	%		35	%		33	%		40	%		43	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Effective September 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.10% for Class IS shares. Prior to September 30, 2015, the maximum ratio was 1.18% for Class IS shares.

(7)  Effective September 30, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.95% for Class IS shares. Prior to September 30, 2016, the maximum ratio was 1.10% for Class IS shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	22.54		$	26.23
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.28			0.20
Net Realized and Unrealized Gain (Loss)		1.94			(3.31	)
Total from Investment Operations		2.22			(3.11	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.38	)
Net Realized Gain		—			(0.20	)
Total Distributions		—			(0.58	)
Redemption Fees		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	24.76		$	22.54
Total Return(4)		9.85	%(6)		(11.82	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	9		$	9
Ratio of Expenses Before Expense Limitation		18.42	%(7)		19.46	%(7)
Ratio of Expenses After Expense Limitation		0.94	%(5)(7)		0.93	%(5)(7)
Ratios of Expenses After Expense Limitation Excluding Non Operating Expenses		0.94	%(5)(7)		N/A
Ratio of Net Investment Income		2.34	%(5)(7)		1.56	%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%(7)
Portfolio Turnover Rate		41	%(6)		56	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Emerging Markets Portfolio. The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

On February 22, 2019, the Fund acquired the net assets of Morgan Stanley Emerging Markets Fund, Inc. ("Emerging Markets Fund"), a closed-end management investment company, based on the respective valuations as of the close of business on February 22, 2019, pursuant to a Plan of Reorganization approved by the shareholders of Emerging Markets Fund on January 7, 2019 ("Reorganization A"). The purpose of the transaction was to combine two 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 9,264,009 Class I shares of the Fund at a net asset value ("NAV") of $24.31 for 13,428,781 shares of Emerging Markets Fund. The net assets of Emerging Markets Fund before Reorganization A were approximately $225,208,000, including unrealized appreciation (depreciation) of approximately $24,269,000 at February 22, 2019. The investment portfolio of Emerging Markets Fund, with a fair value of approximately $220,642,000 and identified cost of approximately $196,373,000, on February 22, 2019, was the principal asset acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Emerging Markets Fund was carried forward to align ongoing reporting of the Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. Immediately prior to Reorganization A, the net assets of the Fund were approximately $1,130,576,000. Immediately after

Reorganization A, the net assets of the Fund were approximately $1,355,784,000.

Upon closing of Reorganization A, shareholders of Emerging Markets Fund received shares of the Fund as follows:

Emerging Markets Fund	Emerging Markets Portfolio
Common Shares	Class I

Assuming the acquisition had been completed on January 1, 2019, the beginning of the annual reporting period of the Fund, the Fund's pro-forma results of operations for the period ended June 30, 2019, are approximately as follows:

Net investment income(1)	$	11,204,000
Net realized gain and unrealized gain(2)	$	127,195,000
Net increase in net assets resulting from operations	$	138,399,000

(1) Approximately $9,853,000 as reported, plus approximately $361,000 Emerging Markets Fund prior to Reorganization A, plus approximately $990,000 of estimated pro-forma eliminated expenses.

(2) Approximately $82,460,000 as reported, plus approximately $44,735,000 Emerging Markets Fund prior to Reorganization A.

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 Emerging Markets Fund that have been included in the Fund's Statement of Operations since February 22, 2019.

On April 5, 2019, the Fund acquired the net assets of Morgan Stanley Asia-Pacific Fund, Inc. ("Asia-Pacific Fund"), a closed-end management investment company, based on the respective valuations as of the close of business on April 5, 2019, pursuant to a Plan of Reorganization approved by the shareholders of Asia-Pacific Fund on March 8, 2019 ("Reorganization B"). 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 8,604,225 Class I shares of the Fund at a NAV of $24.82 for 12,679,878 shares of Asia-Pacific Fund. The net assets of Asia-Pacific Fund before Reorganization B were approximately $213,557,000, including unrealized appreciation (depreciation) of approximately $20,463,000 at April 5, 2019. The investment portfolio of Asia-Pacific Fund, with a fair value of approximately $209,696,000 and identified cost of approximately $189,233,000, on April 5, 2019, was the principal asset acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Asia-Pacific Fund was carried forward to

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

align ongoing reporting of the Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. Immediately prior to Reorganization B, the net assets of the Fund were approximately $840,351,000. Immediately after Reorganization B, the net assets of the Fund were approximately $1,053,908,000.

Upon closing of Reorganization B, shareholders of Asia-Pacific Fund received shares of the Fund as follows:

Asia-Pacific Fund	Emerging Markets Portfolio
Common Shares	Class I

Assuming the acquisition had been completed on January 1, 2019, the beginning of the annual reporting period of the Fund, the Fund's pro-forma results of operations for the period ended June 30, 2019, are approximately as follows:

Net investment income(1)	$	11,941,000
Net realized gain and unrealized gain(2)	$	128,579,000
Net increase in net assets resulting from operations	$	140,520,000

(1) Approximately $9,853,000 as reported, plus approximately $994,000 Asia-Pacific Fund prior to Reorganization B, plus approximately $1,094,000 of estimated pro-forma eliminated expenses.

(2) Approximately $82,460,000 as reported, plus approximately $46,119,000 Asia-Pacific Fund prior to Reorganization B.

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 Asia-Pacific Fund that have been included in the Fund's Statement of Operations since April 5, 2019.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those

fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which the Adviser or Morgan Stanley Investment Management Company ("MSIM Company") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, 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 (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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the NAV as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's

valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's investments as of June 30, 2019:

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	$	—	$	10,731	$	—	$	10,731
Banks		54,157		153,440		—		207,597
Beverages		23,859		15,091		—		38,950
Capital Markets		10,603		2,756		—		13,359
Construction & Engineering		—		7,155		—		7,155
Construction Materials		—		16,826		—		16,826
Consumer Finance		—		2,370		—		2,370
Diversified Consumer Services		10,862		—		—		10,862
Diversified Financial Services		—		12,629		—		12,629
Diversified Telecommunication Services		—		11,343		—		11,343
Electronic Equipment, Instruments & Components		—		6,390		—		6,390
Entertainment		—		2,047		—		2,047
Food & Staples Retailing		19,124		37,787		—		56,911
Food Products		—		15,399		—		15,399
Gas Utilities		5,804		—		—		5,804
Health Care Providers & Services		—		8,017		—		8,017
Hotels, Restaurants & Leisure		3,467		1,956		—		5,423
Household Products		—		3,320		—		3,320
Industrial Conglomerates		—		14,192		—		14,192
Information Technology Services		—		7,200		—		7,200
Insurance		—		35,472		—		35,472
Interactive Media & Services		12,797		39,536		—		52,333
Internet & Direct Marketing Retail		31,679		—		—		31,679
Life Sciences Tools & Services		439		3,717		—		4,156
Machinery		—		6,403		—		6,403
Metals & Mining		12,149		8,459		—		20,608
Multi-Line Retail		17,226		—		—		17,226
Oil, Gas & Consumable Fuels		17,814		19,468		—		37,282
Personal Products		—		8,740		—		8,740
Pharmaceuticals		—		13,360		—		13,360
Real Estate Management & Development		—		12,550		—		12,550

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)
Semiconductors & Semiconductor Equipment	$	—	$	46,517		$	—	$	46,517
Tech Hardware, Storage & Peripherals		—		15,903			—		15,903
Textiles, Apparel & Luxury Goods		—		26,651			—		26,651
Thrifts & Mortgage Finance		—		4,852			—		4,852
Wireless Telecommunication Services		—		6,001			—		6,001
Total Common Stocks		219,980		576,278			—		796,258
Short-Term Investments
Investment Company		35,086		—			—		35,086
Total Assets		255,066		576,278			—		831,344
Liabilities:
Foreign Currency Forward Exchange Contract		—		(485	)		—		(485	)
Total	$	255,066	$	575,793		$	—	$	830,859

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser and/or Sub-Adviser seek to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund 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

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 may 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 Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund 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 Fund as unrealized gain or loss. The Fund 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 Fund'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 Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

As of June 30, 2019, the Fund did not have any open futures contracts.

FASB ASC 815, "Derivatives and Hedging" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Depreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	(485	)

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(2,854	)
Equity Risk	Futures Contracts		4,890
	Total	$	2,036
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	1,285
Equity Risk	Futures Contracts		363
	Total	$	1,648

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives(a)	Assets(b) (000)		Liabilities(b) (000)
Foreign Currency Forward Exchange Contracts	$	—	$	(485	)

(a) Excludes exchange-traded derivatives.

(b) 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 Fund 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 Fund 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 potential 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 Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Pledged (000)		Net Amount (not less than $0) (000)
Goldman Sachs International	$	485	$	—	$	—	$	485

For the six months ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	195,392,000
Futures Contracts:
Average monthly notional value	$	80,996,000

5.  Securities Lending: The Fund 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 Fund. The Fund 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 Fund'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.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Fund has the right under the securities 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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	14,767	(c)	$	—	$	(14,767	)(d)(e)	$	0

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

(d) The Fund received cash collateral of approximately $12,577,000, which was subsequently invested in Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $2,807,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

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

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2019:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	12,577	$	—	$	—	$	—	$	12,577
Total Borrowings	$	12,577	$	—	$	—	$	—	$	12,577
Gross amount of recognized liabilities for securities lending transactions									$	12,577

6.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares, Class IS shares and Class IR shares which

is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

8.  Dividends and Distributions to Shareholders: Dividends 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.

9.  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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $500 million			Next $500 million			Next $1.5 billion			Over $2.5 billion
	0.85	%		0.75	%		0.70	%		0.65	%

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.67% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund 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, 1.40% for Class A shares, 1.90% for Class L shares, 2.15% for Class C shares, 0.95% for Class IS shares and 0.95% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $590,000 of advisory fees were waived and approximately $4,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

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

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid

monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $372,670,000 and $824,866,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $25,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	78,197	$	659,926	$	703,037	$	347

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	35,086

During the six months ended June 30, 2019, the Fund incurred approximately $2,000 in brokerage commissions with Morgan Stanley & Co., LLC, an affiliate of the Adviser/Administrator, Sub-Adviser and Distributor, for portfolio transactions executed on behalf of the Fund.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded

with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	17,069	$	9,096	$	9,134	$	—

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 in the timing of the recognition of gains (losses)

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(3,586	)	$	3,586

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	—	$	926

During the year ended December 31, 2018, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $33,443,000.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	2,835	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 55.0%.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator 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 considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund'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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

29

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

30

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

31

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

32

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

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

Sub-Adviser

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

33

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIEMSAN
2663731 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Emerging Markets Small Cap Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	7
Statement of Operations	9
Statements of Changes in Net Assets	10
Financial Highlights	11
Notes to Financial Statements	15
Investment Advisory Agreement Approval	24
Privacy Notice	26
Director and Officer Information	28

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Emerging Markets Small Cap Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Emerging Markets Small Cap Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Emerging Markets Small Cap Portfolio Class I	$	1,000.00	$	1,123.50	$	1,018.35	$	6.84	$	6.51		1.30	%
Emerging Markets Small Cap Portfolio Class A		1,000.00		1,120.60		1,016.61		8.68		8.25		1.65
Emerging Markets Small Cap Portfolio Class C		1,000.00		1,116.90		1,012.89		12.60		11.98		2.40
Emerging Markets Small Cap Portfolio Class IS		1,000.00		1,123.40		1,018.60		6.58		6.26		1.25

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Emerging Markets Small Cap Portfolio

	Shares		Value (000)
Common Stocks (96.3%)
Argentina (3.4%)
Banco Macro SA ADR		12,200	$	889
Despegar.com Corp. (a)		48,790		677
Globant SA (a)		6,519		659
				2,225
Brazil (6.0%)
Banco ABC Brasil SA (Preference)		203,893		1,021
BK Brasil Operacao e Assessoria a Restaurantes SA		161,404		935
Estacio Participacoes SA		85,797		648
Fleury SA		108,903		605
Odontoprev SA		165,338		786
				3,995
China (13.9%)
Baozun, Inc ADR (a)(b)		17,701		883
Beijing Thunisoft Corp., Ltd., Class A		258,254		716
China CYTS Tours Holding Co., Ltd., Class A		381,140		705
China Education Group Holdings Ltd. (b)(c)		608,000		950
China Everbright Greentech Ltd. (c)		998,000		649
China Foods Ltd. (c)		1,902,000		789
China New Higher Education Group Ltd. (b)(c)		1,646,000		641
Focused Photonics Hangzhou, Inc., Class A		210,900		735
JNBY Design Ltd. (c)		418,000		767
Laobaixing Pharmacy Chain JSC, Class A		80,700		688
OneSmart International Education Group Ltd. ADR (a)(b)		110,351		878
Shenzhen Airport Co., Ltd., Class A		631,000		817
				9,218
Egypt (2.8%)
Credit Agricole Egypt SAE		323,149		910
Integrated Diagnostics Holdings PLC		147,361		731
Juhayna Food Industries		312,389		193
				1,834
Germany (1.0%)
Jumia Technologies AG ADR (a)		24,653		651
India (18.9%)
Blue Star Ltd.		82,002		922
Cholamandalam Investment and Finance Co., Ltd.		100,506		416
CreditAccess Grameen Ltd. (a)		129,919		977
Crompton Greaves Consumer Electricals Ltd.		100,939		341
Dilip Buildcon Ltd.		116,124		823
Gujarat Gas Ltd.		444,007		1,112
Gulf Oil Lubricants India Ltd.		66,926		835
Indraprastha Gas Ltd.		227,567		1,039
Inox Leisure Ltd. (a)		186,856		886
PVR Ltd.		35,313		857
Ramco Cements Ltd. (The)		84,750		963
Sterlite Technologies Ltd.		308,271		785
TCI Express Ltd.		102,459		979

	Shares		Value (000)
Voltas Ltd.		89,961	$	840
Westlife Development Ltd. (a)		171,416		759
				12,534
Indonesia (5.6%)
Ace Hardware Indonesia Tbk PT		6,619,100		848
Bank Tabungan Pensiunan Nasional Syariah Tbk PT (a)		4,633,800		1,132
Mitra Adiperkasa Tbk PT		11,479,600		731
Nippon Indosari Corpindo Tbk PT		10,676,600		967
				3,678
Kenya (0.8%)
KCB Group Ltd.		1,484,600		550
Korea, Republic of (12.8%)
AfreecaTV Co., Ltd.		14,503		774
BusinessOn Communication Co., Ltd.		43,685		697
Cafe24 Corp. (a)		8,070		429
Dentium Co., Ltd.		14,211		906
Douzone Bizon Co., Ltd.		18,580		1,002
Ecopro BM Co., Ltd. (a)		12,371		640
Innocean Worldwide, Inc.		14,435		891
JB Financial Group Co., Ltd.		166,707		854
JYP Entertainment Corp.		38,450		797
Koh Young Technology, Inc.		11,506		828
Nasmedia Co., Ltd.		18,939		642
				8,460
Kuwait (0.6%)
Boubyan Bank KSCP		35,480		68
Humansoft Holding Co. KSC		29,750		310
				378
Malaysia (1.8%)
Bermaz Auto Bhd		1,830,700		1,179
Mexico (1.0%)
Gentera SAB de CV		775,127		671
Morocco (1.1%)
Societe d'Exploitation des Ports		37,995		750
Nigeria (0.9%)
Guaranty Trust Bank PLC		6,364,118		581
Pakistan (0.2%)
MCB Bank Ltd.		109,598		120
Philippines (3.9%)
MacroAsia Corp.		1,759,250		655
Puregold Price Club, Inc.		690,700		606
Security Bank Corp.		188,230		625
Wilcon Depot, Inc.		2,185,000		716
				2,602
Poland (1.0%)
Dino Polska SA (a)		19,471		684
Russia (1.2%)
HeadHunter Group PLC ADR (b)		47,872		778

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Small Cap Portfolio

	Shares		Value (000)
South Africa (3.0%)
Advtech Ltd.		760,249	$	745
Massmart Holdings Ltd.		118,911		526
Transaction Capital Ltd.		528,492		749
				2,020
Taiwan (12.8%)
ASPEED Technology, Inc.		31,000		592
Bizlink Holding, Inc.		116,560		810
Cub Elecparts, Inc.		97,556		794
King Slide Works Co., Ltd.		72,000		711
Merida Industry Co., Ltd.		120,000		710
Poya International Co., Ltd.		67,492		914
Sunny Friend Environmental Technology Co., Ltd.		112,000		998
Taiwan Hon Chuan Enterprise Co., Ltd.		363,000		647
Taiwan Paiho Ltd.		324,000		939
TCI Co., Ltd.		54,894		756
Vanguard International Semiconductor Corp.		276,000		581
				8,452
Thailand (1.5%)
Muangthai Capital PCL (Foreign Shares)		552,400		1,018
United Kingdom (1.1%)
Network International Holdings PLC (a)		95,259		718
Vietnam (1.0%)
Sai Gon Cargo Service Corp.		97,800		676
Total Common Stocks (Cost $59,208)				63,772
	No. of Warrants
Warrants (2.0%)
Saudi Arabia (2.0%)
HSBC Bank PLC, expires 7/8/20 (a)		77,981		688
HSBC Bank PLC, expires 2/5/21 (a)		34,403		619
Total Warrants (Cost $1,216)				1,307

	Shares		Value (000)
Short-Term Investments (3.7%)
Securities held as Collateral on Loaned Securities (1.9%)
Investment Company (1.9%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $1,251)		1,250,785	$	1,251
Investment Company (1.8%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $1,194)		1,194,192		1,194
Total Short-Term Investments (Cost $2,445)				2,445
Total Investments (102.0%) (Cost $62,869) Including $2,139 of Securities Loaned(d)(e)(f)				67,524
Liabilities in Excess of Other Assets (–2.0%)				(1,292	)
Net Assets (100.0%)			$	66,232

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2019.

(c)  Security trades on the Hong Kong exchange.

(d)  The approximate fair value and percentage of net assets, $52,673,000 and 79.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

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

(f)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $8,052,000 and the aggregate gross unrealized depreciation is approximately $3,408,000, resulting in net unrealized appreciation of approximately $4,644,000.

ADR  American Depositary Receipt.

Foreign Currency Forward Exchange Contract:

The Fund had the following foreign currency forward exchange contract open at June 30, 2019:

Counterparty	Contract to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Depreciation (000)
UBS AG	HKD	22,991	$	2,932	7/18/19	$	(11	)

HKD  —  Hong Kong Dollar

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Emerging Markets Small Cap Portfolio

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		77.7	%
Banks		10.2
Diversified Consumer Services		6.3
Consumer Finance		5.8
Total Investments		100.0	%***

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2019.

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

***  Does not include an open foreign currency forward exchange contract with unrealized depreciation of $11,000.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Small Cap Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $60,424)	$	65,079
Investment in Security of Affiliated Issuer, at Value (Cost $2,445)		2,445
Total Investments in Securities, at Value (Cost $62,869)		67,524
Foreign Currency, at Value (Cost $871)		870
Dividends Receivable		130
Receivable for Investments Sold		38
Receivable from Securities Lending Income		5
Receivable for Fund Shares Sold		4
Receivable from Affiliate		2
Tax Reclaim Receivable		—	@
Other Assets		45
Total Assets		68,618
Liabilities:
Collateral on Securities Loaned, at Value		1,251
Payable for Investments Purchased		912
Payable for Advisory Fees		130
Payable for Professional Fees		62
Unrealized Depreciation on Foreign Currency Forward Exchange Contract		11
Payable for Custodian Fees		10
Payable for Administration Fees		4
Payable for Sub Transfer Agency Fees — Class I		4
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		2
Total Liabilities		2,386
Net Assets	$	66,232
Net Assets Consist of:
Paid-in-Capital	$	62,684
Total Distributable Earnings		3,548
Net Assets	$	66,232

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Small Cap Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	57,745
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,845,664
Net Asset Value, Offering and Redemption Price Per Share	$	11.92
CLASS A:
Net Assets	$	274
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		23,173
Net Asset Value, Redemption Price Per Share	$	11.80
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.65
Maximum Offering Price Per Share	$	12.45
CLASS C:
Net Assets	$	37
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,227
Net Asset Value, Offering and Redemption Price Per Share	$	11.56
CLASS IS:
Net Assets	$	8,176
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		685,646
Net Asset Value, Offering and Redemption Price Per Share	$	11.93
(1) Including: Securities on Loan, at Value:	$	2,139

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Emerging Markets Small Cap Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $83 of Foreign Taxes Withheld)	$	720
Income from Securities Loaned — Net		21
Dividends from Security of Affiliated Issuer (Note G)		11
Total Investment Income		752
Expenses:
Advisory Fees (Note B)		389
Professional Fees		50
Custodian Fees (Note F)		32
Administration Fees (Note C)		25
Registration Fees		24
Sub Transfer Agency Fees — Class I		16
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class C		—	@
Shareholder Reporting Fees		7
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		3
Pricing Fees		3
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		9
Total Expenses		562
Waiver of Advisory Fees (Note B)		(151	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(4	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		403
Net Investment Income		349
Realized Gain (Loss):
Investments Sold		168
Foreign Currency Forward Exchange Contracts		17
Foreign Currency Translation		(23	)
Net Realized Gain		162
Change in Unrealized Appreciation (Depreciation):
Investments		6,616
Foreign Currency Forward Exchange Contracts		(14	)
Foreign Currency Translation		(2	)
Net Change in Unrealized Appreciation (Depreciation)		6,600
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		6,762
Net Increase in Net Assets Resulting from Operations	$	7,111

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Emerging Markets Small Cap Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	349		$	54
Net Realized Gain (Loss)		162			(1,613	)
Net Change in Unrealized Appreciation (Depreciation)		6,600			(6,836	)
Net Increase (Decrease) in Net Assets Resulting from Operations		7,111			(8,395	)
Dividends and Distributions to Shareholders:
Class I		—			(774	)
Class A		—			(3	)
Class C		—			(1	)
Class IS		—			(114	)
Total Dividends and Distributions to Shareholders		—			(892	)
Capital Share Transactions:(1)
Class I:
Subscribed		5,611			35,038
Distributions Reinvested		—			203
Redeemed		(3,013	)		(3,753	)
Class A:
Subscribed		84			82
Distributions Reinvested		—			3
Redeemed		(17	)		(48	)
Class C:
Subscribed		—			17
Distributions Reinvested		—			—	@
Class IS:
Subscribed		—			8,100
Distributions Reinvested		—			114
Net Increase in Net Assets Resulting from Capital Share Transactions		2,665			39,756
Redemption Fees		—	@		—	@
Total Increase in Net Assets		9,776			30,469
Net Assets:
Beginning of Period		56,456			25,987
End of Period	$	66,232		$	56,456
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		493			2,938
Shares Issued on Distributions Reinvested		—			17
Shares Redeemed		(262	)		(357	)
Net Increase in Class I Shares Outstanding		231			2,598
Class A:
Shares Subscribed		8			6
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(2	)		(4	)
Net Increase in Class A Shares Outstanding		6			2
Class C:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—			—	@@
Net Increase in Class C Shares Outstanding		—			1
Class IS:
Shares Subscribed		—			675
Shares Issued on Distributions Reinvested		—			10
Net Increase in Class IS Shares Outstanding		—			685

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Small Cap Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from December 15, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	10.61		$	12.77		$	9.85		$	10.28		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.06			0.02			(0.01	)		0.02			0.01
Net Realized and Unrealized Gain (Loss)		1.25			(2.01	)		3.38			(0.35	)		0.27
Total from Investment Operations		1.31			(1.99	)		3.37			(0.33	)		0.28
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.10	)		—
Net Realized Gain		—			(0.17	)		(0.45	)		—			—
Total Distributions		—			(0.17	)		(0.45	)		(0.10	)		—
Redemption Fees		0.00	(3)		0.00	(3)		—			—			—
Net Asset Value, End of Period	$	11.92		$	10.61		$	12.77		$	9.85		$	10.28
Total Return(4)		12.35	%(8)		(15.73	)%		34.29	%		(3.19	)%		2.80	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	57,745		$	48,965		$	25,762		$	19,673		$	20,536
Ratio of Expenses Before Expense Limitation		1.80	%(9)		2.18	%		2.58	%		2.63	%		7.62	%(9)
Ratio of Expenses After Expense Limitation		1.30	%(5)(9)		1.41	%(5)(6)		1.57	%(5)		1.61	%(5)		1.58	%(5)(9)
Ratio of Net Investment Income (Loss)		1.12	%(5)(9)		0.14	%(5)		(0.09	)%(5)		0.16	%(5)		1.01	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.01	%		0.04	%		0.00	%(7)		0.03	%(9)
Portfolio Turnover Rate		33	%(8)		70	%		71	%		69	%		5	%(8)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.30% for Class I shares. Prior to July 13, 2018, the maximum ratio was 1.65% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Small Cap Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from December 15, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	10.53		$	12.72		$	9.85		$	10.28		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.05			(0.01	)		(0.06	)		(0.02	)		0.00	(3)
Net Realized and Unrealized Gain (Loss)		1.22			(2.01	)		3.38			(0.35	)		0.28
Total from Investment Operations		1.27			(2.02	)		3.32			(0.37	)		0.28
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.06	)		—
Net Realized Gain		—			(0.17	)		(0.45	)		—			—
Total Distributions		—			(0.17	)		(0.45	)		(0.06	)		—
Redemption Fees		0.00	(3)		0.00	(3)		—			—			—
Net Asset Value, End of Period	$	11.80		$	10.53		$	12.72		$	9.85		$	10.28
Total Return(4)		12.06	%(8)		(16.03	)%		33.79	%		(3.58	)%		2.80	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	274		$	179		$	188		$	10		$	10
Ratio of Expenses Before Expense Limitation		2.75	%(9)		3.49	%		12.38	%		22.65	%		21.45	%(9)
Ratio of Expenses After Expense Limitation		1.65	%(5)(9)		1.83	%(5)(6)		1.96	%(5)		2.00	%(5)		1.97	%(5)(9)
Ratio of Net Investment Income (Loss)		0.80	%(5)(9)		(0.11	)%(5)		(0.50	)%(5)		(0.22	)%(5)		0.62	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.01	%		0.04	%		0.00	%(7)		0.03	%(9)
Portfolio Turnover Rate		33	%(8)		70	%		71	%		69	%		5	%(8)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.65% for Class A shares. Prior to July 13, 2018, the maximum ratio was 2.00% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Small Cap Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from December 15, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	10.35		$	12.60		$	9.84		$	10.28		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.00	)(3)		(0.10	)		(0.15	)		(0.10	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		1.21			(1.98	)		3.36			(0.34	)		0.28
Total from Investment Operations		1.21			(2.08	)		3.21			(0.44	)		0.28
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.17	)		(0.45	)		—			—
Redemption Fees		0.00	(3)		0.00	(3)		—			—			—
Net Asset Value, End of Period	$	11.56		$	10.35		$	12.60		$	9.84		$	10.28
Total Return(4)		11.69	%(8)		(16.66	)%		32.70	%		(4.28	)%		2.80	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	37		$	33		$	24		$	10		$	10
Ratio of Expenses Before Expense Limitation		7.72	%(9)		9.02	%		20.48	%		23.48	%		22.20	%(9)
Ratio of Expenses After Expense Limitation		2.40	%(5)(9)		2.58	%(5)(6)		2.71	%(5)		2.75	%(5)		2.73	%(5)(9)
Ratio of Net Investment Loss		(0.00	)%(5)(7)(9)		(0.84	)%(5)		(1.27	)%(5)		(0.99	)%(5)		(0.14	)%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.01	%		0.04	%		0.00	%(7)		0.02	%(9)
Portfolio Turnover Rate		33	%(8)		70	%		71	%		69	%		5	%(8)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.40% for Class C shares. Prior to July 13, 2018, the maximum ratio was 2.75% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Emerging Markets Small Cap Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from December 15, 2015(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016			December 31, 2015
Net Asset Value, Beginning of Period	$	10.62		$	12.77		$	9.85		$	10.28		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.07			0.00	(3)		(0.01	)		0.02			0.01
Net Realized and Unrealized Gain (Loss)		1.24			(1.98	)		3.38			(0.35	)		0.27
Total from Investment Operations		1.31			(1.98	)		3.37			(0.33	)		0.28
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.10	)		—
Net Realized Gain		—			(0.17	)		(0.45	)		—			—
Total Distributions		—			(0.17	)		(0.45	)		(0.10	)		—
Redemption Fees		0.00	(3)		0.00	(3)		—			—			—
Net Asset Value, End of Period	$	11.93		$	10.62		$	12.77		$	9.85		$	10.28
Total Return(4)		12.34	%(8)		(15.65	)%		34.29	%		(3.18	)%		2.80	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8,176		$	7,279		$	13		$	10		$	10
Ratio of Expenses Before Expense Limitation		1.76	%(9)		2.10	%		19.47	%		21.37	%		21.20	%(9)
Ratio of Expenses After Expense Limitation		1.25	%(5)(9)		1.26	%(5)(6)		1.55	%(5)		1.60	%(5)		1.58	%(5)(9)
Ratio of Net Investment Income (Loss)		1.15	%(5)(9)		0.03	%(5)		(0.08	)%(5)		0.16	%(5)		1.01	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.01	%		0.05	%		0.00	%(7)		0.02	%(9)
Portfolio Turnover Rate		33	%(8)		70	%		71	%		69	%		5	%(8)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective July 13, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class IS shares. Prior to July 13, 2018, the maximum ratio was 1.60% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Emerging Markets Small Cap Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices

if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (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

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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 Fund's investments as of June 30, 2019:

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	$	—	$	1,655	$	—	$	1,655
Auto Components		—		794		—		794
Banks		1,910		4,840		—		6,750
Building Products		—		922		—		922
Chemicals		—		835		—		835
Commercial Services & Supplies		—		1,733		—		1,733
Communications Equipment		—		785		—		785
Construction & Engineering		—		1,663		—		1,663

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (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)
Construction Materials	$	—	$	963		$	—	$	963
Consumer Finance		671		3,160			—		3,831
Containers & Packaging		—		647			—		647
Diversified Consumer Services		1,526		2,646			—		4,172
Electrical Equipment		—		1,450			—		1,450
Entertainment		—		2,540			—		2,540
Food & Staples Retailing		—		2,504			—		2,504
Food Products		—		1,949			—		1,949
Gas Utilities		—		2,151			—		2,151
Health Care Equipment & Supplies		—		906			—		906
Health Care Providers & Services		1,391		731			—		2,122
Hotels, Restaurants & Leisure		935		1,464			—		2,399
Household Durables		—		341			—		341
Independent Power & Renewable Electricity Producers		—		649			—		649
Information Technology Services		—		1,147			—		1,147
Interactive Media & Services		—		774			—		774
Internet & Direct Marketing Retail		2,211		—			—		2,211
Leisure Products		—		710			—		710
Machinery		—		711			—		711
Media		—		1,533			—		1,533
Multi-Line Retail		—		1,645			—		1,645
Personal Products		—		756			—		756
Professional Services		778		—			—		778
Semiconductors & Semiconductor Equipment		—		2,001			—		2,001
Software		659		2,415			—		3,074
Specialty Retail		—		2,743			—		2,743
Textiles, Apparel & Luxury Goods		—		1,706			—		1,706
Transportation Infrastructure		—		2,222			—		2,222
Total Common Stocks		10,081		53,691			—		63,772
Warrants		—		1,307			—		1,307
Short-Term Investments
Investment Company		2,445		—			—		2,445
Total Assets		12,526		54,998			—		67,524
Liabilities:
Foreign Currency Forward Exchange Contract		—		(11	)		—		(11	)
Total	$	12,526	$	54,987		$	—	$	67,513

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

A significant portion of the Fund's net assets consist of securities of issuers located in emerging markets, which are denominated in foreign currencies. Such securities may be concentrated in a limited number of countries

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

and regions and may vary throughout the year. Changes in currency exchange rates will affect the value of securities and investment income from foreign currency denominated securities. Emerging market securities are often subject to greater price volatility, limited capitalization and liquidity, and higher rates of inflation than securities of companies based in the U.S. In addition, emerging market issuers may be subject to substantial governmental involvement in the economy and greater social, economic and political uncertainty.

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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seek to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund 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 may reduce or preclude the opportunity for gain if the value of the currency should move in

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund 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 Fund as unrealized gain or loss. The Fund 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" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Liability Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Depreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	(11	)

The following tables set forth by primary risk exposure the Fund's change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$17
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$(14)

At June 30, 2019, the Fund'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 Contract	$	—	$	(11	)

(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 Fund 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 Fund 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 potential 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 Fund 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 Fund 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 Fund's net liability may be delayed or denied.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Statement of Assets and Liabilities (000)		Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
UBS AG	$	11	$	—	$	—	$	11

For the six months ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	2,726,000

5.  Securities Lending: The Fund 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 Fund. The Fund 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 Fund'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 Fund has the right under the securities 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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	2,139	(b)	$	—	$	(2,139	)(c)(d)	$	0

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

(c) The Fund received cash collateral of approximately $1,251,000 which was subsequently invested in Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $1,011,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

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

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2019:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	1,251	$	—	$	—	$	—	$	1,251
Total Borrowings	$	1,251	$	—	$	—	$	—	$	1,251
Gross amount of recognized liabilities for securities lending transactions									$	1,251

6.  Redemption Fees: The Fund will assess a 2% redemption fee, on Class I shares, Class A shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

8.  Dividends and Distributions to Shareholders: Dividends 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.

9.  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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 1.25% of the average daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund 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% Class I shares, 1.65% for Class A shares, 2.40% for Class C shares and 1.25% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $151,000 of advisory fees were waived and approximately $7,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $22,971,000 and $20,631,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	1,517	$	12,274	$	11,346	$	11

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	2,445

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as

other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	—	$	892	$	—	$	892

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 a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)		Paid-in Capital (000)
$	59	$	(59	)

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $1,496,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to

defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	9	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 59.6%.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was better than its peer group average for the one-year period but below its peer group average for the three-year period and the period since the end of December 2015, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's contractual management fee was higher than but close to its peer group average and the actual management fee and total expense ratio were higher than its peer group averages. After discussion, the Board concluded that the Fund's performance, management fee and total expense ratio were acceptable.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

25

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

26

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

28

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIEMSCSAN
2663743 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Frontier Markets Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	16
Investment Advisory Agreement Approval	23
Privacy Notice	25
Director and Officer Information	27

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Frontier Markets Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Frontier Markets Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Frontier Markets Portfolio Class I	$	1,000.00	$	1,124.70	$	1,015.62	$	9.75	$	9.25		1.85	%
Frontier Markets Portfolio Class A		1,000.00		1,122.30		1,013.88		11.58		10.99		2.20
Frontier Markets Portfolio Class L		1,000.00		1,119.20		1,011.41		14.19		13.47		2.70
Frontier Markets Portfolio Class C		1,000.00		1,118.30		1,010.47		15.49		14.70		2.95
Frontier Markets Portfolio Class IS		1,000.00		1,124.70		1,015.87		9.48		9.00		1.80

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Frontier Markets Portfolio

	Shares		Value (000)
Common Stocks (96.8%)
Argentina (4.2%)
Banco Macro SA ADR		41,534	$	3,026
Despegar.com Corp. (a)		180,335		2,505
Globant SA (a)		23,177		2,342
				7,873
Bangladesh (2.0%)
Square Pharmaceuticals Ltd.		1,216,406		3,787
Egypt (5.0%)
Commercial International Bank Egypt SAE		878,242		3,841
Egyptian Financial Group-Hermes Holding Co.		3,099,554		3,193
Integrated Diagnostics Holdings PLC		481,288		2,386
				9,420
Germany (1.4%)
Jumia Technologies AG ADR (a)		98,337		2,598
Indonesia (1.0%)
Mitra Adiperkasa Tbk PT		31,143,500		1,984
Kenya (9.1%)
Equity Group Holdings PLC		10,578,194		4,023
KCB Group Ltd.		11,149,568		4,131
Safaricom PLC		32,710,937		8,940
				17,094
Kuwait (26.3%)
Boubyan Bank KSCP		2,428,277		4,647
Gulf Bank KSCP		4,882,386		4,899
Humansoft Holding Co. KSC		439,415		4,577
Mobile Telecommunications Co. KSC		6,628,641		11,578
National Bank of Kuwait		7,446,238		23,899
				49,600
Morocco (5.0%)
Attijariwafa Bank		128,286		6,235
Societe d'Exploitation des Ports		165,347		3,263
				9,498
Nigeria (9.4%)
Dangote Cement PLC		7,788,346		3,973
Guaranty Trust Bank PLC		67,419,505		6,153
MTN Nigeria Communications PLC (a)		7,785,392		2,804
Nestle Nigeria PLC		1,045,987		4,033
Zenith Bank PLC		12,048,059		662
				17,625
Oman (1.6%)
Bank Muscat SAOG		2,873,059		3,047
Pakistan (0.3%)
MCB Bank Ltd.		507,521		554
Philippines (1.1%)
Puregold Price Club, Inc.		2,287,400		2,007
Romania (7.3%)
Banca Transilvania SA		12,275,515		7,077
BRD-Groupe Societe Generale SA		1,265,142		3,849

	Shares		Value (000)
Societatea Nationala de Gaze Naturale ROMGAZ SA		367,951	$	2,852
				13,778
Russia (1.4%)
HeadHunter Group PLC ADR		161,164		2,619
Saudi Arabia (2.5%)
Bupa Arabia for Cooperative Insurance Co. (a)		83,011		2,146
United International Transportation Co. (a)		287,677		2,539
				4,685
Singapore (1.3%)
Sea Ltd. ADR (a)		74,634		2,479
Tanzania, United Republic of (0.6%)
NMB Bank PLC (b)(c)		6,718,721		1,217
United Arab Emirates (1.7%)
NMC Health PLC		103,413		3,156
United Kingdom (2.9%)
Coca-Cola HBC AG (a)		60,522		2,290
Network International Holdings PLC (a)		423,589		3,192
				5,482
United States (1.7%)
MercadoLibre, Inc. (a)		5,138		3,143
Vietnam (11.0%)
Masan Group Corp. (a)		1,395,100		4,970
Mobile World Investment Corp.		619,463		2,857
PetroVietnam Power Corp (a)		4,291,150		2,800
Sai Gon Cargo Service Corp.		331,440		2,290
Saigon Beer Alcohol Beverage Corp.		266,130		3,140
Vietnam Dairy Products JSC		4		—	@
Vincom Retail JSC		3,224,723		4,685
				20,742
Total Common Stocks (Cost $155,111)				182,388
Participation Note (1.2%)
Saudi Arabia (1.2%)
Jarir Marketing Co., Equity Linked Notes, expires 1/19/21 (a) (Cost $1,783)		53,007		2,334
	No. of Warrants
Warrant (1.3%)
Saudi Arabia (1.3%)
HSBC Bank PLC, expires 2/5/21 (a) (Cost $2,409)		134,127		2,411
Total Investments (99.3%) (Cost $159,303) (d)(e)				187,133
Other Assets in Excess of Liabilities (0.7%)				1,254
Net Assets (100.0%)			$	188,387

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Frontier Markets Portfolio

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security has been deemed illiquid at June 30, 2019.

(c)  At June 30, 2019, the Fund held a fair valued security valued at approximately $1,217,000, representing 0.6% 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 Company's (as defined herein) Directors.

(d)  The approximate fair value and percentage of net assets, $152,113,000 and 80.7%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $37,092,000 and the aggregate gross unrealized depreciation is approximately $9,262,000, resulting in net unrealized appreciation of approximately $27,830,000.

@  Value is less than $500.

ADR  American Depositary Receipt.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		46.2	%
Banks		41.3
Wireless Telecommunication Services		12.5
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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Frontier Markets Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $159,303)	$	187,133
Foreign Currency, at Value (Cost $1,867)		1,867
Receivable for Investments Sold		810
Dividends Receivable		559
Receivable for Fund Shares Sold		209
Receivable from Affiliate		1
Other Assets		91
Total Assets		190,670
Liabilities:
Payable for Advisory Fees		558
Payable for Fund Shares Redeemed		489
Bank Overdraft		380
Payable for Custodian Fees		340
Payable for Investments Purchased		316
Payable for Sub Transfer Agency Fees — Class I		60
Payable for Sub Transfer Agency Fees — Class A		4
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Professional Fees		38
Payable for Transfer Agency Fees — Class I		35
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		1
Payable for Administration Fees		13
Payable for Shareholder Services Fees — Class A		6
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		1
Other Liabilities		41
Total Liabilities		2,283
Net Assets	$	188,387
Net Assets Consist of:
Paid-in-Capital	$	241,392
Total Accumulated Loss		(53,005	)
Net Assets	$	188,387

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Frontier Markets Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	154,883
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		8,798,294
Net Asset Value, Offering and Redemption Price Per Share	$	17.60
CLASS A:
Net Assets	$	28,990
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,652,312
Net Asset Value, Redemption Price Per Share	$	17.55
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.97
Maximum Offering Price Per Share	$	18.52
CLASS L:
Net Assets	$	759
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		43,384
Net Asset Value, Offering and Redemption Price Per Share	$	17.48
CLASS C:
Net Assets	$	1,424
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		82,658
Net Asset Value, Offering and Redemption Price Per Share	$	17.23
Class IS:
Net Assets	$	2,331
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		132,399
Net Asset Value, Offering and Redemption Price Per Share	$	17.60

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Frontier Markets Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $328 of Foreign Taxes Withheld)	$	7,088
Dividends from Security of Affiliated Issuer (Note G)		5
Total Investment Income		7,093
Expenses:
Advisory Fees (Note B)		1,453
Custodian Fees (Note F)		505
Sub Transfer Agency Fees — Class I		129
Sub Transfer Agency Fees — Class A		25
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		1
Administration Fees (Note C)		93
Professional Fees		75
Shareholder Services Fees — Class A (Note D)		42
Distribution and Shareholder Services Fees — Class L (Note D)		4
Distribution and Shareholder Services Fees — Class C (Note D)		8
Transfer Agency Fees — Class I (Note E)		35
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Registration Fees		36
Shareholder Reporting Fees		23
Directors' Fees and Expenses		8
Pricing Fees		2
Other Expenses		24
Expenses Before Non Operating Expenses		2,468
Bank Overdraft Expense		65
Total Expenses		2,533
Waiver of Advisory Fees (Note B)		(127	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(115	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		2,286
Net Investment Income		4,807
Realized Loss:
Investments Sold		(1,309	)
Foreign Currency Translation		(279	)
Net Realized Loss		(1,588	)
Change in Unrealized Appreciation (Depreciation):
Investments		25,474
Foreign Currency Translation		(3	)
Net Change in Unrealized Appreciation (Depreciation)		25,471
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		23,883
Net Increase in Net Assets Resulting from Operations	$	28,690

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Frontier Markets Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	4,807		$	9,740
Net Realized Loss		(1,588	)		(10,050	)
Net Change in Unrealized Appreciation (Depreciation)		25,471			(135,947	)
Net Increase (Decrease) in Net Assets Resulting from Operations		28,690			(136,257	)
Dividends and Distributions to Shareholders:
Class I		—			(13,142	)
Class A		—			(1,255	)
Class L		—			(20	)
Class C		—			(26	)
Class IS		—			(190	)
Total Dividends and Distributions to Shareholders		—			(14,633	)
Capital Share Transactions:(1)
Class I:
Subscribed		16,235			134,972
Distributions Reinvested		—			9,070
Redeemed		(115,104	)		(416,758	)
Class A:
Subscribed		3,330			21,353
Distributions Reinvested		—			1,253
Redeemed		(12,883	)		(59,351	)
Class L:
Exchanged		—			16
Distributions Reinvested		—			20
Redeemed		(599	)		(810	)
Class C:
Subscribed		1			207
Distributions Reinvested		—			25
Redeemed		(414	)		(818	)
Class IS:
Subscribed		187			21,329
Distributions Reinvested		—			190
Redeemed		(2,934	)		(28,473	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(112,181	)		(317,775	)
Redemption Fees		5			8
Total Decrease in Net Assets		(83,486	)		(468,657	)
Net Assets:
Beginning of Period		271,873			740,530
End of Period	$	188,387		$	271,873

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Frontier Markets Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		968			6,991
Shares Issued on Distributions Reinvested		—			542
Shares Redeemed		(6,864	)		(22,923	)
Net Decrease in Class I Shares Outstanding		(5,896	)		(15,390	)
Class A:
Shares Subscribed		197			1,230
Shares Issued on Distributions Reinvested		—			75
Shares Redeemed		(765	)		(3,224	)
Net Decrease in Class A Shares Outstanding		(568	)		(1,919	)
Class L:
Shares Exchanged		—			1
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(36	)		(47	)
Net Decrease in Class L Shares Outstanding		(36	)		(45	)
Class C:
Shares Subscribed		—			11
Shares Issued on Distributions Reinvested		—			2
Shares Redeemed		(25	)		(45	)
Net Decrease in Class C Shares Outstanding		(25	)		(32	)
Class IS:
Shares Subscribed		11			1,005
Shares Issued on Distributions Reinvested		—			11
Shares Redeemed		(175	)		(1,497	)
Net Decrease in Class IS Shares Outstanding		(164	)		(481	)

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Frontier Markets Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	15.63		$	21.02		$	17.39		$	16.98		$	19.15		$	18.86
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.34			0.33			0.16			0.31			0.19			0.25
Net Realized and Unrealized Gain (Loss)		1.63			(5.07	)		3.47			0.33			(2.21	)		0.23
Total from Investment Operations		1.97			(4.74	)		3.63			0.64			(2.02	)		0.48
Distributions from and/or in Excess of:
Net Investment Income		—			(0.65	)		—			(0.23	)		(0.14	)		(0.18	)
Paid-in-Capital		—			—			—			(0.00	)(3)		(0.01	)		(0.01	)
Total Distributions		—			(0.65	)		—			(0.23	)		(0.15	)		(0.19	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	17.60		$	15.63		$	21.02		$	17.39		$	16.98		$	19.15
Total Return(4)		12.47	%(8)		(22.60	)%		20.82	%		3.83	%		(10.58	)%		2.66	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	154,883		$	229,688		$	632,435		$	525,664		$	531,927		$	547,535
Ratio of Expenses Before Expense Limitation		2.08	%(9)		N/A			N/A			1.69	%		N/A			1.72	%
Ratio of Expenses After Expense Limitation		1.91	%(5)(7)(9)		1.77	%(5)		1.73	%(5)		1.67	%(5)		1.72	%(5)		1.69	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.85	%(5)(9)		1.76	%(5)		1.73	%(5)		N/A			N/A			1.71	%(5)
Ratio of Net Investment Income		4.10	%(5)(9)		1.68	%(5)		0.82	%(5)		1.82	%(5)		1.02	%(5)		1.23	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(9)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.01	%
Portfolio Turnover Rate		39	%(8)		61	%		52	%		30	%		37	%		52	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Frontier Markets Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	15.61		$	20.86		$	17.31		$	16.90		$	19.06		$	18.78
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.34			0.34			0.11			0.24			0.11			0.18
Net Realized and Unrealized Gain (Loss)		1.60			(5.10	)		3.44			0.35			(2.18	)		0.24
Total from Investment Operations		1.94			(4.76	)		3.55			0.59			(2.07	)		0.42
Distributions from and/or in Excess of:
Net Investment Income		—			(0.49	)		—			(0.18	)		(0.08	)		(0.13	)
Paid-in-Capital		—			—			—			(0.00	)(3)		(0.01	)		(0.01	)
Total Distributions		—			(0.49	)		—			(0.18	)		(0.09	)		(0.14	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	17.55		$	15.61		$	20.86		$	17.31		$	16.90		$	19.06
Total Return(4)		12.23	%(8)		(22.80	)%		20.39	%		3.49	%		(10.90	)%		2.39	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	28,990		$	34,654		$	86,324		$	90,817		$	82,480		$	76,839
Ratio of Expenses Before Expense Limitation		2.32	%(9)		N/A			N/A			2.03	%		N/A			2.05	%
Ratio of Expenses After Expense Limitation		2.26	%(5)(7)(9)		2.07	%(5)		2.05	%(5)		2.01	%(5)		2.07	%(5)		2.02	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		2.20	%(5)(9)		2.06	%(5)		2.05	%(5)		N/A			N/A			2.04	%(5)
Ratio of Net Investment Income		4.10	%(5)(9)		1.71	%(5)		0.59	%(5)		1.40	%(5)		0.60	%(5)		0.90	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(9)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.01	%
Portfolio Turnover Rate		39	%(8)		61	%		52	%		30	%		37	%		52	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Frontier Markets Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	15.59		$	20.65		$	17.25		$	16.79		$	18.96		$	18.71
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.25			0.17			(0.02	)		0.15			0.05			0.06
Net Realized and Unrealized Gain (Loss)		1.64			(4.98	)		3.42			0.32			(2.22	)		0.25
Total from Investment Operations		1.89			(4.81	)		3.40			0.47			(2.17	)		0.31
Distributions from and/or in Excess of:
Net Investment Income		—			(0.25	)		—			(0.01	)		—			(0.05	)
Paid-in-Capital		—			—			—			(0.00	)(3)		—			(0.01	)
Total Distributions		—			(0.25	)		—			(0.01	)		—			(0.06	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	17.48		$	15.59		$	20.65		$	17.25		$	16.79		$	18.96
Total Return(4)		11.92	%(8)		(23.19	)%		19.59	%		2.77	%		(11.49	)%		1.77	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	759		$	1,241		$	2,570		$	2,630		$	4,490		$	8,003
Ratio of Expenses Before Expense Limitation		2.93	%(9)		N/A			2.76	%		2.80	%		2.73	%		2.68	%
Ratio of Expenses After Expense Limitation		2.76	%(5)(7)(9)		2.57	%(5)		2.70	%(5)		2.70	%(5)		2.70	%(5)		2.65	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		2.70	%(5)(9)		2.56	%(5)		2.70	%(5)		N/A			N/A			2.67	%(5)
Ratio of Net Investment Income (Loss)		2.93	%(5)(9)		0.88	%(5)		(0.13	)%(5)		0.88	%(5)		0.26	%(5)		0.27	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(9)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.01	%
Portfolio Turnover Rate		39	%(8)		61	%		52	%		30	%		37	%		52	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Frontier Markets Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	15.38		$	20.41		$	17.07		$	16.69		$	19.53
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		0.27			0.11			(0.05	)		0.10			(0.16	)
Net Realized and Unrealized Gain (Loss)		1.58			(4.90	)		3.39			0.34			(2.60	)
Total from Investment Operations		1.85			(4.79	)		3.34			0.44			(2.76	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.24	)		—			(0.06	)		(0.07	)
Paid-in-Capital		—			—			—			(0.00	)(4)		(0.01	)
Total Distributions		—			(0.24	)		—			(0.06	)		(0.08	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	17.23		$	15.38		$	20.41		$	17.07		$	16.69
Total Return(5)		11.83	%(9)		(23.42	)%		19.51	%		2.63	%		(14.10	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,424		$	1,657		$	2,857		$	1,925		$	1,400
Ratio of Expenses Before Expense Limitation		3.13	%(10)		N/A			N/A			2.89	%		3.17	%(10)
Ratio of Expenses After Expense Limitation		3.01	%(6)(8)(10)		2.83	%(6)		2.81	%(6)		2.88	%(6)		2.95	%(6)(10)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		2.95	%(6)(10)		2.82	%(6)		2.81	%(6)		N/A			N/A
Ratio of Net Investment Income (Loss)		3.23	%(6)(10)		0.56	%(6)		(0.26	)%(6)		0.57	%(6)		(1.38	)%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(10)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(10)
Portfolio Turnover Rate		39	%(9)		61	%		52	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Commencement of offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Amount is less than 0.005%.

(8)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Frontier Markets Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from February 27, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	15.63		$	21.02		$	17.39		$	16.97		$	19.28
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.27			0.58			0.13			0.30			0.26
Net Realized and Unrealized Gain (Loss)		1.70			(5.33	)		3.50			0.36			(2.41	)
Total from Investment Operations		1.97			(4.75	)		3.63			0.66			(2.15	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.64	)		—			(0.24	)		(0.15	)
Paid-in-Capital		—			—			—			(0.00	)(4)		(0.01	)
Total Distributions		—			(0.64	)		—			(0.24	)		(0.16	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	17.60		$	15.63		$	21.02		$	17.39		$	16.97
Total Return(5)		12.47	%(9)		(22.61	)%		20.83	%		3.88	%		(11.14	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,331		$	4,633		$	16,344		$	12,055		$	7,732
Ratio of Expenses Before Expense Limitation		2.00	%(10)		N/A			N/A			1.64	%		1.68	%(10)
Ratio of Expenses After Expense Limitation		1.86	%(6)(8)(10)		1.74	%(6)		1.69	%(6)		1.62	%(6)		1.68	%(6)(10)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.80	%(6)(10)		1.73	%(6)		1.69	%(6)		N/A			N/A
Ratio of Net Investment Income		3.16	%(6)(10)		2.85	%(6)		0.65	%(6)		1.75	%(6)		1.67	%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(10)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(10)
Portfolio Turnover Rate		39	%(9)		61	%		52	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(7)  Amount is less than 0.005%.

(8)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Frontier Markets Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (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

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	—	$	2,290	$	—	$	2,290
Banks		3,026		73,017		1,217		77,260
Beverages		—		5,430		—		5,430
Capital Markets		—		3,193		—		3,193
Construction Materials		—		3,973		—		3,973
Diversified Consumer Services		—		4,577		—		4,577
Entertainment		2,479		—		—		2,479
Food & Staples Retailing		—		2,007		—		2,007
Food Products		—		9,003		—		9,003
Health Care Providers & Services		—		5,542		—		5,542
Independent Power & Renewable Electricity Producers		—		2,800		—		2,800
Information Technology Services		—		3,192		—		3,192
Insurance		—		2,146		—		2,146
Internet & Direct Marketing Retail		8,246		—		—		8,246
Multi-Line Retail		—		1,984		—		1,984
Oil, Gas & Consumable Fuels		—		2,852		—		2,852
Pharmaceuticals		—		3,787		—		3,787
Professional Services		2,619		—		—		2,619
Real Estate Management & Development		—		4,685		—		4,685
Road & Rail		—		2,539		—		2,539
Software		2,342		—		—		2,342
Specialty Retail		—		2,857		—		2,857

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Transportation Infrastructure	$	—	$	3,263	$	—	$	3,263
Wireless Telecommunication Services		2,804		20,518		—		23,322
Total Common Stocks		21,516		159,655		1,217		182,388
Participation Note		—		2,334		—		2,334
Warrant		—		2,411		—		2,411
Total Assets	$	21,516	$	164,400	$	1,217	$	187,133

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

	Common Stock (000)
Beginning Balance	$	—
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		1,217
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		—
Realized gains (losses)		—
Ending Balance	$	1,217
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2019	$	—

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, 2019. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance. The Fund calculated the weighted averages of the unobservable inputs relative to each investment's fair value as of June 30, 2019.

	Fair Value at June 30, 2019 (000)		Valuation Technique	Unobservable Input	Amount or Range/Weighted Average*			Impact to Valuation from an Increase in Input**
Common Stock	$	1,217	Market Comparable Companies	Price/Book Value of Equity		0.4	x	Increase
				Discount for Lack of Marketability		40.0	%	Decrease

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

A significant portion of the Fund's net assets consist of securities of issuers located in emerging markets, which are denominated in foreign currencies. Such securities may be concentrated in a limited number of countries

and regions and may vary throughout the year. Changes in currency exchange rates will affect the value of securities and investment income from foreign currency denominated securities. Emerging market securities are often subject to greater price volatility, limited capitalization and liquidity, and higher rates of inflation than securities of companies based in the U.S. In addition, emerging market issuers may be subject to substantial governmental involvement in the economy and greater social, economic and political uncertainty.

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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Structured Investments: The Fund 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 Fund 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 Fund 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

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

effect of increasing the Fund's illiquidity to the extent that the Fund, at a particular time, may be unable to find qualified buyers for these securities.

5.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at an annual rate of 1.25% of the daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.85% for Class I shares, 2.20% for Class A shares, 2.70% for Class L shares, 2.95% for Class C shares and 1.80% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $127,000 of advisory fees were waived and approximately $120,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $89,637,000 and $196,029,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by

the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	—	$	23,691	$	23,691	$	5

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	—

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	14,633	$	—	$	—	$	—

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 a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)		Paid-in- Capital (000)
$	91	$	(91	)

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $78,733,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	103	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 53.1%.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below 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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's contractual management fee and total expense ratio were lower than its peer group averages and its actual management fee was higher than its peer group average. After discussion, the Board concluded that the Fund's (i) performance was acceptable, (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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

24

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

25

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

27

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIFEMSAN
2663776 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Advantage Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	15
Investment Advisory Agreement Approval	25
Privacy Notice	27
Director and Officer Information	29

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Advantage Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Advantage Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Advantage Portfolio Class I	$	1,000.00	$	1,284.40	$	1,019.34	$	6.23	$	5.51		1.10	%
Global Advantage Portfolio Class A		1,000.00		1,282.30		1,017.75		8.04		7.10		1.42
Global Advantage Portfolio Class L		1,000.00		1,278.60		1,015.12		11.02		9.74		1.95
Global Advantage Portfolio Class C		1,000.00		1,277.10		1,013.88		12.42		10.99		2.20

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Advantage Portfolio

	Shares		Value (000)
Common Stocks (94.6%)
Canada (8.9%)
Brookfield Asset Management, Inc., Class A		40,371	$	1,929
Canadian National Railway Co.		35,226		3,258
Constellation Software, Inc.		7,420		6,993
				12,180
France (15.4%)
Christian Dior SE		12,535		6,572
EssilorLuxottica SA		36,758		4,805
Hermes International		6,747		4,866
L'Oreal SA		17,237		4,910
				21,153
Germany (3.4%)
Zalando SE (a)		106,179		4,711
Italy (1.3%)
Brunello Cucinelli SpA		53,102		1,791
Netherlands (3.4%)
Adyen N.V. (a)		6,024		4,652
New Zealand (3.7%)
Xero Ltd. (a)		121,675		5,117
United Kingdom (3.5%)
Rentokil Initial PLC		939,878		4,749
United States (55.0%)
Adobe, Inc. (a)		11,923		3,513
Amazon.com, Inc. (a)		3,343		6,330
Broadridge Financial Solutions, Inc.		15,832		2,021
Copart, Inc. (a)		27,689		2,070
Ecolab, Inc.		25,241		4,984
Elanco Animal Health, Inc. (a)		60,808		2,055
Farfetch Ltd., Class A (a)		243,640		5,068
Gartner, Inc. (a)		12,585		2,025
Intuitive Surgical, Inc. (a)		9,206		4,829
MakeMyTrip Ltd. (a)		72,071		1,787
MercadoLibre, Inc. (a)		10,499		6,423
MSCI, Inc.		8,707		2,079
Rollins, Inc.		56,904		2,041
S&P Global, Inc.		9,020		2,055
salesforce.com, Inc. (a)		13,056		1,981
ServiceNow, Inc. (a)		16,721		4,591
Spotify Technology SA (a)		42,398		6,199
Twitter, Inc. (a)		118,527		4,137
Walt Disney Co. (The)		34,345		4,796
Workday, Inc., Class A (a)		22,087		4,541
Zoetis, Inc.		19,593		2,224
				75,749
Total Common Stocks (Cost $105,199)				130,102

	Shares		Value (000)
Preferred Stocks (0.2%)
United States (0.2%)
Airbnb, Inc. Series D (a)(b)(c)(d) (acquisition cost — $78; acquired 4/16/14)		1,917	$	245
Lookout, Inc. Series F (a)(b)(c)(d) (acquisition cost — $73; acquired 6/17/14)		6,374		16
Palantir Technologies Inc Series G (a)(b)(c)(d) (acquisition cost — $9; acquired 7/19/12)		2,935		13
Palantir Technologies, Inc. Series H (a)(b)(c)(d) (acquisition cost — $6; acquired 10/25/13)		1,572		8
Palantir Technologies, Inc. Series H1 (a)(b)(c)(d) (acquisition cost — $6; acquired 10/25/13)		1,572		8
Total Preferred Stocks (Cost $172)				290
Short-Term Investment (4.7%)
Investment Company (4.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $6,532)		6,531,747		6,532
Total Investments Excluding Purchased Options (99.5%) (Cost $111,903)				136,924
Total Purchased Options Outstanding (0.1%) (Cost $527)				146
Total Investments (99.6%) (Cost $112,430) (e)(f)				137,070
Other Assets in Excess of Liabilities (0.4%)				534
Net Assets (100.0%)			$	137,604

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  At June 30, 2019, the Fund held fair valued securities valued at approximately $290,000, representing 0.2% 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 Company's (as defined herein) Directors.

(c)  Security has been deemed illiquid at June 30, 2019.

(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 Fund 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, 2019, amounts to approximately $290,000 and represents 0.2% of net assets.

(e)  The approximate fair value and percentage of net assets, $42,173,000 and 30.6%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $25,377,000 and the aggregate gross unrealized depreciation is approximately $737,000, resulting in net unrealized appreciation of approximately $24,640,000.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Advantage Portfolio

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2019:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.58	Jan-20		21,248,072		21,248	$	49		$	109	$	(60	)
Royal Bank of Scotland	USD/CNH	CNH	7.78	Jul-19		28,325,392		28,325		—	@		138		(138	)
Royal Bank of Scotland	USD/CNH	CNH	7.85	Jun-20		25,784,929		25,785		84			133		(49	)
Royal Bank of Scotland	USD/CNH	CNH	8.00	Oct-19		25,081,610		25,082		13			147		(134	)
									$	146		$	527	$	(381	)

@  —  Value is less than $500.

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		28.6	%
Software		19.5
Internet & Direct Marketing Retail		17.9
Textiles, Apparel & Luxury Goods		13.2
Entertainment		8.0
Commercial Services & Supplies		6.5
Information Technology Services		6.3
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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Advantage Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $105,898)	$	130,538
Investment in Security of Affiliated Issuer, at Value (Cost $6,532)		6,532
Total Investments in Securities, at Value (Cost $112,430)		137,070
Foreign Currency, at Value (Cost $4)		4
Cash		13
Receivable for Fund Shares Sold		880
Receivable for Investments Sold		130
Tax Reclaim Receivable		46
Dividends Receivable		31
Receivable from Affiliate		5
Receivable from Securities Lending Income		—	@
Other Assets		84
Total Assets		138,263
Liabilities:
Payable for Advisory Fees		240
Payable for Investments Purchased		134
Payable for Fund Shares Redeemed		129
Payable for Professional Fees		78
Payable for Transfer Agency Fees — Class I		11
Payable for Transfer Agency Fees — Class A		3
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		4
Payable for Shareholder Services Fees — Class A		8
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		9
Payable for Sub Transfer Agency Fees — Class I		12
Payable for Sub Transfer Agency Fees — Class A		4
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		9
Payable for Custodian Fees		5
Other Liabilities		12
Total Liabilities		659
Net Assets	$	137,604
Net Assets Consist of:
Paid-in-Capital	$	114,886
Total Distributable Earnings		22,718
Net Assets	$	137,604

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Advantage Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	83,891
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,678,403
Net Asset Value, Offering and Redemption Price Per Share	$	17.93
CLASS A:
Net Assets	$	42,783
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,433,400
Net Asset Value, Redemption Price Per Share	$	17.58
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.97
Maximum Offering Price Per Share	$	18.55
CLASS L:
Net Assets	$	568
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		33,633
Net Asset Value, Offering and Redemption Price Per Share	$	16.89
CLASS C:
Net Assets	$	10,362
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		622,772
Net Asset Value, Offering and Redemption Price Per Share	$	16.64

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Advantage Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $64 of Foreign Taxes Withheld)	$	456
Income from Securities Loaned — Net		41
Non-Cash Dividends from Securities of Unaffiliated Issuers		39
Dividends from Security of Affiliated Issuer (Note G)		29
Total Investment Income		565
Expenses:
Advisory Fees (Note B)		485
Shareholder Services Fees — Class A (Note D)		47
Distribution and Shareholder Services Fees — Class L (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		50
Registration Fees		56
Sub Transfer Agency Fees — Class I		29
Sub Transfer Agency Fees — Class A		24
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		3
Administration Fees (Note C)		48
Professional Fees		41
Transfer Agency Fees — Class I (Note E)		13
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		5
Custodian Fees (Note F)		15
Shareholder Reporting Fees		8
Directors' Fees and Expenses		4
Pricing Fees		1
Reorganization Expense		1
Other Expenses		9
Expenses Before Non Operating Expenses		846
Bank Overdraft Expense		2
Total Expenses		848
Reimbursement of Class Specific Expenses — Class I (Note B)		(42	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(14	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(3	)
Waiver of Advisory Fees (Note B)		(4	)
Rebate from Morgan Stanley Affiliate (Note G)		(2	)
Net Expenses		782
Net Investment Loss		(217	)
Realized Gain:
Investments Sold		2,984
Foreign Currency Translation		1
Net Realized Gain		2,985
Change in Unrealized Appreciation (Depreciation):
Investments		26,401
Foreign Currency Translation		(—	@)
Net Change in Unrealized Appreciation (Depreciation)		26,401
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		29,386
Net Increase in Net Assets Resulting from Operations	$	29,169

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Advantage Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(217	)	$	(123	)
Net Realized Gain (Loss)		2,985			(3,518	)
Net Change in Unrealized Appreciation (Depreciation)		26,401			(3,994	)
Net Increase (Decrease) in Net Assets Resulting from Operations		29,169			(7,635	)
Dividends and Distributions to Shareholders:
Class I		—			(727	)
Class A		—			(314	)
Class L		—			(14	)
Class C		—			(47	)
Total Dividends and Distributions to Shareholders		—			(1,102	)
Capital Share Transactions:(1)
Class I:
Subscribed		17,275			25,380
Issued due to a Tax-free Reorganization		—			58,648
Distributions Reinvested		—			619
Redeemed		(11,210	)		(25,880	)
Class A:
Subscribed		6,470			6,300
Issued due to a Tax-free Reorganization		—			29,480
Distributions Reinvested		—			313
Redeemed		(5,984	)		(4,930	)
Class L:
Exchanged		—			16
Issued due to a Tax-free Reorganization		—			191
Distributions Reinvested		—			14
Redeemed		(22	)		(40	)
Class C:
Subscribed		455			930
Issued due to a Tax-free Reorganization		—			9,958
Distributions Reinvested		—			46
Redeemed		(1,794	)		(1,521	)
Net Increase in Net Assets Resulting from Capital Share Transactions		5,190			99,524
Total Increase in Net Assets		34,359			90,787
Net Assets:
Beginning of Period		103,245			12,458
End of Period	$	137,604		$	103,245

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Advantage Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		1,053			1,627
Shares Issued due to a Tax-free Reorganization		—			3,982
Shares Issued on Distributions Reinvested		—			40
Shares Redeemed		(691	)		(1,786	)
Net Increase in Class I Shares Outstanding		362			3,863
Class A:
Shares Subscribed		396			411
Shares Issued due to a Tax-free Reorganization		—			2,037
Shares Issued on Distributions Reinvested		—			21
Shares Redeemed		(387	)		(346	)
Net Increase in Class A Shares Outstanding		9			2,123
Class L:
Shares Exchanged		—			1
Shares Issued due to a Tax-free Reorganization		—			14
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(1	)		(3	)
Net Increase (Decrease) in Class L Shares Outstanding		(1	)		13
Class C:
Shares Subscribed		30			62
Shares Issued due to a Tax-free Reorganization		—			724
Shares Issued on Distributions Reinvested		—			3
Shares Redeemed		(119	)		(115	)
Net Increase (Decrease) in Class C Shares Outstanding		(89	)		674

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Advantage Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	13.96		$	15.43		$	12.12		$	12.36		$	12.74		$	13.57
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.01	)		(0.03	)		(0.03	)		0.00	(3)		0.05			0.05
Net Realized and Unrealized Gain (Loss)		3.98			(0.80	)		5.07			0.02			0.46			0.04
Total from Investment Operations		3.97			(0.83	)		5.04			0.02			0.51			0.09
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.03	)		(0.01	)
Net Realized Gain		—			(0.64	)		(1.73	)		(0.26	)		(0.86	)		(0.91	)
Total Distributions		—			(0.64	)		(1.73	)		(0.26	)		(0.89	)		(0.92	)
Net Asset Value, End of Period	$	17.93		$	13.96		$	15.43		$	12.12		$	12.36		$	12.74
Total Return(4)		28.44	%(8)		(5.75	)%		41.56	%		0.21	%		3.85	%		0.83	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	83,891		$	60,271		$	7,005		$	3,229		$	1,785		$	3,181
Ratio of Expenses Before Expense Limitation		1.22	%(9)		1.82	%		3.67	%		3.82	%		5.38	%		5.31	%
Ratio of Expenses After Expense Limitation		1.10	%(5)(9)		1.09	%(5)		1.09	%(5)		1.09	%(5)		1.11	%(5)(6)		1.30	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.10	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.17	)%(5)(9)		(0.19	)%(5)		(0.19	)%(5)		0.04	%(5)		0.37	%(5)		0.40	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.01	%		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		50	%(8)		130	%		103	%		90	%		90	%		46	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.10% for Class I shares. Prior to January 23, 2015, the maximum ratio was 1.30% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Advantage Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	13.71		$	15.21		$	12.01		$	12.29		$	12.70		$	13.57
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.04	)		(0.08	)		(0.08	)		(0.05	)		(0.04	)		0.01
Net Realized and Unrealized Gain (Loss)		3.91			(0.78	)		5.01			0.03			0.49			0.04
Total from Investment Operations		3.87			(0.86	)		4.93			(0.02	)		0.45			0.05
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.01	)
Net Realized Gain		—			(0.64	)		(1.73	)		(0.26	)		(0.86	)		(0.91	)
Total Distributions		—			(0.64	)		(1.73	)		(0.26	)		(0.86	)		(0.92	)
Net Asset Value, End of Period	$	17.58		$	13.71		$	15.21		$	12.01		$	12.29		$	12.70
Total Return(3)		28.23	%(8)		(6.03	)%		41.02	%		(0.11	)%		3.40	%		0.46	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	42,783		$	33,240		$	4,577		$	2,640		$	3,414		$	790
Ratio of Expenses Before Expense Limitation		1.50	%(9)		1.95	%		3.88	%		4.09	%		5.92	%		5.79	%
Ratio of Expenses After Expense Limitation		1.42	%(4)(9)		1.41	%(4)(6)		1.41	%(4)		1.44	%(4)		1.45	%(4)(5)		1.65	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.42	%(4)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.50	)%(4)(9)		(0.54	)%(4)		(0.52	)%(4)		(0.38	)%(4)		(0.34	)%(4)		0.05	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.01	%		0.01	%		0.01	%		0.01	%		0.00	%(7)
Portfolio Turnover Rate		50	%(8)		130	%		103	%		90	%		90	%		46	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(5)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.45% for Class A shares. Prior to January 23, 2015, the maximum ratio was 1.65% for Class A shares.

(6)  Effective November 19, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.42% for Class A shares. Prior to November 19, 2018, the maximum ratio was 1.45% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Advantage Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	13.21		$	14.75		$	11.74		$	12.09		$	12.56		$	13.50
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.08	)		(0.16	)		(0.15	)		(0.10	)		(0.08	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		3.76			(0.74	)		4.89			0.01			0.47			0.04
Total from Investment Operations		3.68			(0.90	)		4.74			(0.09	)		0.39			(0.02	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.01	)
Net Realized Gain		—			(0.64	)		(1.73	)		(0.26	)		(0.86	)		(0.91	)
Total Distributions		—			(0.64	)		(1.73	)		(0.26	)		(0.86	)		(0.92	)
Net Asset Value, End of Period	$	16.89		$	13.21		$	14.75		$	11.74		$	12.09		$	12.56
Total Return(3)		27.86	%(7)		(6.50	)%		40.34	%		(0.70	)%		2.96	%		(0.07	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	568		$	462		$	327		$	217		$	382		$	338
Ratio of Expenses Before Expense Limitation		2.48	%(8)		3.29	%		5.07	%		5.12	%		6.58	%		6.55	%
Ratio of Expenses After Expense Limitation		1.95	%(4)(8)		1.94	%(4)		1.94	%(4)		1.94	%(4)		1.96	%(4)(5)		2.15	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.95	%(4)(8)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.02	)%(4)(8)		(1.03	)%(4)		(1.05	)%(4)		(0.86	)%(4)		(0.60	)%(4)		(0.45	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.01	%		0.01	%		0.01	%		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		50	%(7)		130	%		103	%		90	%		90	%		46	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.95% for Class L shares. Prior to January 23, 2015, the maximum ratio was 2.15% for Class L shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Advantage Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	13.03		$	14.60		$	11.66		$	12.04		$	13.30
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.10	)		(0.18	)		(0.19	)		(0.13	)		(0.11	)
Net Realized and Unrealized Gain (Loss)		3.71			(0.75	)		4.86			0.01			(0.26	)
Total from Investment Operations		3.61			(0.93	)		4.67			(0.12	)		(0.37	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.03	)
Net Realized Gain		—			(0.64	)		(1.73	)		(0.26	)		(0.86	)
Total Distributions		—			(0.64	)		(1.73	)		(0.26	)		(0.89	)
Net Asset Value, End of Period	$	16.64		$	13.03		$	14.60		$	11.66		$	12.04
Total Return(4)		27.71	%(7)		(6.77	)%		40.02	%		(0.95	)%		(2.94	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10,362		$	9,272		$	549		$	180		$	59
Ratio of Expenses Before Expense Limitation		2.26	%(8)		2.70	%		5.22	%		6.12	%		12.84	%(8)
Ratio of Expenses After Expense Limitation		2.20	%(5)(8)		2.19	%(5)		2.19	%(5)		2.19	%(5)		2.20	%(5)(8)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		2.20	%(5)(8)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.28	)%(5)(8)		(1.29	)%(5)		(1.30	)%(5)		(1.12	)%(5)		(1.33	)%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.01	%		0.01	%		0.01	%		0.00	%(6)(8)
Portfolio Turnover Rate		50	%(7)		130	%		103	%		90	%		90	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Advantage Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class L and Class C. On April 30, 2015, the Fund suspended offering Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

On November 16, 2018, the Fund acquired the net assets of the Company's Global Insight Portfolio ("Global Insight") and Global Discovery Portfolio ("Global Discovery"), an open-end investment company, based on the respective valuations as of the close of business on November 16, 2018, pursuant to a Plan of Reorganization approved by the shareholders of Global Insight and Global Discovery on October 17, 2018 ("Reorganization"). The purpose of the transaction was to combine three 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 454,229 Class I shares of the Fund at a net asset value ("NAV") of $14.73 for 541,872 Class I shares of Global Insight and 3,527,274 Class I shares of the Fund at a NAV of $14.73 for 3,735,808 Class I shares of Global Discovery; 153,953 Class A shares of the Fund at a NAV of $14.47 for 180,488 Class A shares of Global Insight and 1,883,383 Class A shares of the Fund at a NAV of $14.47 for 1,972,973 Class A shares of Global Discovery; 4,092 Class L shares of the Fund at a NAV of $13.95 for 4,734 Class L shares of Global Insight and 9,567 Class L shares of the Fund at a NAV of $13.95 for 9,832 Class L shares of Global Discovery; 20,813 Class C shares of the Fund at a NAV of $13.76 for 24,021 Class C shares of Global Insight and 702,884 Class C shares of the Fund at a NAV of $13.76 for 725,549 Class C shares of Global Discovery. The net assets of Global Insight and Global Discovery before the Reorganization were approximately $9,262,000 and $89,014,000, respectively, including unrealized appreciation (depreciation) of approximately $462,000 and $(32,000), respectively at November 16, 2018. The investment portfolio of Global Insight and Global Discovery, with a fair value of approximately $9,273,000 and

$92,205,000, respectively and identified cost of approximately $8,811,000 and $92,237,000, respectively, on November 16, 2018, was the principal asset acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from Global Insight and Global Discovery was carried forward to align ongoing reporting of the Fund'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 Fund were approximately $29,406,000. Immediately after the Reorganization, the net assets of the Fund were approximately $127,682,000.

Upon closing of the Reorganization, shareholders of Global Insight and Global Discovery received shares of the Fund as follows:

Global Insight Portfolio	Global Discovery Portfolio	Global Advantage Portfolio
Class I	Class I	Class I
Class A	Class A	Class A
Class L	Class L	Class L
Class C	Class C	Class C

Assuming the acquisition had been completed on January 1, 2018, the beginning of the annual reporting period of the Fund, the Fund's pro forma results of operations for the year ended December 31, 2018, are as follows:

Net investment Income(1)	$	3,545,000
Net realized gain and unrealized gain(2)	$	5,637,000
Net increase in net assets resulting from operations	$	9,182,000

(1) Approximately $(123,000) as reported, plus approximately $167,000 from Global Insight and $1,695,000 from Global Discovery prior to the Reorganization, plus approximately $153,000 Global Insight and $1,653,000 from Global Discovery of estimated pro-forma eliminated expenses.

(2) Approximately $(7,512,000) as reported, plus approximately $1,936,000 from Global Insight and $11,213,000 from Global Discovery prior to the Reorganization.

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 Insight and Global Discovery that have been included in the Fund's Statement of Operations since November 16, 2018.

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 Company in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

and disclosures in the financial statements. Actual results may differ from those estimates.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the

mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (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 its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (5) 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; (6) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

dollar equivalents at the prevailing market rates prior to the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the NAV as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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 Fund's investments as of June 30, 2019:

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
Capital Markets	$	6,063	$	—	$	—	$	6,063
Chemicals		4,984		—		—		4,984
Commercial Services & Supplies		4,111		4,749		—		8,860
Entertainment		10,995		—		—		10,995
Health Care Equipment & Supplies		4,829		—		—		4,829
Information Technology Services		4,046		4,652		—		8,698
Interactive Media & Services		4,137		—		—		4,137
Internet & Direct Marketing Retail		19,608		4,711		—		24,319
Personal Products		—		4,910		—		4,910
Pharmaceuticals		4,279		—		—		4,279
Road & Rail		3,258		—		—		3,258
Software		21,619		5,117		—		26,736
Textiles, Apparel & Luxury Goods		—		18,034		—		18,034
Total Common Stocks		87,929		42,173		—		130,102
Preferred Stocks
Internet & Direct Marketing Retail		—		—		245		245
Software		—		—		45		45
Total Preferred Stocks		—		—		290		290
Call Options Purchased				146				146
Short-Term Investment
Investment Company		6,532		—		—		6,532
Total Assets	$	94,461	$	42,319	$	290	$	137,070

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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

	Preferred Stocks (000)
Beginning Balance	$	273
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		17
Realized gains (losses)		—
Ending Balance	$	290
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2019	$	17

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, 2019. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance. The Fund calculated the weighted averages of the unobservable inputs relative to each investment's fair value as of June 30, 2019.

	Fair Value at June 30, 2019 (000)		Valuation Technique	Unobservable Input	Amount or Range/ Weighted Average*		Impact to Valuation from an Increase in Input**
Preferred Stocks	$	290	Discounted Cash Flow	Weighted Average Cost of Capital		13.5%–19.5%/14.7%	Decrease
				Perpetual Growth Rate		3.0%–4.0%/3.5%	Increase
			Market Comparable Companies	Enterprise Value/Revenue		1.6x–14.7x/6.6x	Increase
				Discount for Lack of Marketability		10.0%–20.0%/10.8%	Decrease
			Comparable Transactions	Enterprise Value/Revenue		2.3x–16.0x/8.9x	Increase

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund 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 Fund'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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund 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 in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the

Fund. When options are purchased OTC, the Fund 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 Fund 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" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	146	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	DerivativeType	Value (000)
Currency Risk	Investments (Purchased Options)		$(13)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$(159)(c)

(c) Amounts are included in Investments in the Statement of Operations.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	146	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) 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 Fund 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 Fund 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 potential 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 Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
BNP Paribas	$	49		$	—	$	—	$	49
Royal Bank of Scotland		97			—		—		97
Total	$	146	(a)	$	—	$	—	$	146

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the six months ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	78,953,000

5.  Restricted Securities: The Fund 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 Fund 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 Fund, 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 Fund can 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 the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

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

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

7.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Non-cash dividends received in the form of stock, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.79% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund 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, 1.42% for Class A shares, 1.95% for Class L shares and 2.20% for Class C 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, 2019, approximately $4,000 of advisory fees were waived and approximately $60,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $59,835,000 and $60,353,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $2,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	2,648	$	27,869	$	23,985	$	29

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	6,532

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:						2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Paid-in- Capital (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	126	$	974	$	2	$	64	$	1,195

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 in 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 adjustments related to the Reorganization, a net operating loss and a dividend redesignation, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)			Paid-in- Capital (000)
$	(352	)	$	352

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year.

For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	66	$	3,303

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 30.3%.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund'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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's contractual management fee was higher than its peer group average, the actual management fee was lower than its peer group average and the total expense ratio was higher than but close to its peer group average. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

26

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

27

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

29

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGASAN

2663794 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Concentrated Real Estate Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	9
Notes to Financial Statements	13
Investment Advisory Agreement Approval	19
Privacy Notice	21
Director and Officer Information	23

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Concentrated Real Estate Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Concentrated Real Estate Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Concentrated Real Estate Portfolio Class I	$	1,000.00	$	1,085.60	$	1,020.18	$	4.81	$	4.66		0.93	%
Global Concentrated Real Estate Portfolio Class A		1,000.00		1,083.20		1,018.35		6.71		6.51		1.30
Global Concentrated Real Estate Portfolio Class C		1,000.00		1,078.60		1,014.63		10.57		10.24		2.05
Global Concentrated Real Estate Portfolio Class IS		1,000.00		1,086.80		1,020.33		4.66		4.51		0.90

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Concentrated Real Estate Portfolio

	Shares		Value (000)
Common Stocks (97.3%)
Australia (1.3%)
GPT Group (The) REIT		5,159	$	22
Scentre Group REIT		14,673		40
				62
Canada (0.4%)
RioCan Real Estate Investment Trust REIT		838		17
Finland (0.3%)
Citycon Oyj		1,361		14
France (6.5%)
Gecina SA REIT		507		76
ICADE REIT		97		9
Klepierre SA REIT		5,448		182
Unibail-Rodamco-Westfield REIT		267		40
				307
Germany (0.9%)
ADO Properties SA		185		8
Deutsche Wohnen SE		976		36
				44
Hong Kong (20.9%)
CK Asset Holdings Ltd.		1,935		15
Hongkong Land Holdings Ltd.		37,972		245
Hysan Development Co., Ltd.		10,547		55
Link REIT		4,982		61
Mandarin Oriental International Ltd.		58,076		103
New World Development Co., Ltd.		10,047		16
Sino Land Co., Ltd.		9,991		17
Sun Hung Kai Properties Ltd.		15,291		260
Swire Properties Ltd.		40,608		164
Wharf Real Estate Investment Co., Ltd.		6,607		46
				982
Ireland (0.1%)
Hibernia REIT PLC		2,806		5
Japan (4.6%)
GLP J-REIT		1		1
Mitsubishi Estate Co., Ltd.		5,567		104
Mitsui Fudosan Co., Ltd.		3,383		82
Nippon Building Fund, Inc. REIT		4		28
				215
Netherlands (1.4%)
Eurocommercial Properties N.V. CVA REIT		2,407		64
Norway (0.2%)
Entra ASA		746		12
Singapore (0.3%)
CapitaLand Ltd.		3,097		8
UOL Group Ltd.		937		5
				13

	Shares		Value (000)
Spain (1.6%)
Inmobiliaria Colonial Socimi SA REIT		1,071	$	12
Merlin Properties Socimi SA REIT		4,407		61
				73
Sweden (0.4%)
Hufvudstaden AB, Class A		1,026		17
United Kingdom (9.8%)
British Land Co., PLC (The) REIT		13,992		96
Derwent London PLC REIT		1,810		72
Great Portland Estates PLC REIT		9,030		78
Hammerson PLC REIT		18,400		65
Land Securities Group PLC REIT		12,647		134
St. Modwen Properties PLC		1,003		5
Urban & Civic PLC		1,805		8
				458
United States (48.6%)
American Homes 4 Rent, Class A REIT		371		9
Apartment Investment & Management Co., Class A REIT		759		38
AvalonBay Communities, Inc. REIT		598		122
Boston Properties, Inc. REIT		1,451		187
Brixmor Property Group, Inc. REIT		2,633		47
Camden Property Trust REIT		154		16
Columbia Property Trust, Inc. REIT		458		10
CubeSmart REIT		32		1
DiamondRock Hospitality Co. REIT		4,732		49
Equity Residential REIT		1,398		106
Essex Property Trust, Inc. REIT		93		27
Federal Realty Investment Trust REIT		188		24
Healthcare Realty Trust, Inc. REIT		552		17
Host Hotels & Resorts, Inc. REIT		6,487		118
Hudson Pacific Properties, Inc. REIT		1,511		50
JBG SMITH Properties REIT		783		31
Life Storage, Inc. REIT		242		23
Macerich Co. (The) REIT		5,536		185
Mack-Cali Realty Corp. REIT		3,494		81
Mid-America Apartment Communities, Inc. REIT		117		14
Paramount Group, Inc. REIT		2,732		38
ProLogis, Inc. REIT		342		27
Public Storage REIT		54		13
QTS Realty Trust, Inc., Class A REIT		64		3
Regency Centers Corp. REIT		1,375		92
RLJ Lodging Trust REIT		3,196		57
Simon Property Group, Inc. REIT		1,828		292
SITE Centers Corp. REIT		459		6
SL Green Realty Corp. REIT		4,278		344
Sunstone Hotel Investors, Inc. REIT		3,837		53
Vornado Realty Trust REIT		3,147		202
				2,282
Total Common Stocks (Cost $4,824)				4,565

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Concentrated Real Estate Portfolio

	Shares		Value (000)
Short-Term Investment (1.3%)
Investment Company (1.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $63)		63,336	$	63
Total Investments (98.6%) (Cost $4,887) (a)(b)				4,628
Other Assets in Excess of Liabilities (1.4%)				64
Net Assets (100.0%)			$	4,692

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  The approximate market value and percentage of total investments, $2,266,000 and 48.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to Financial Statements.

(b)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $175,000 and the aggregate gross unrealized depreciation is approximately $434,000, resulting in net unrealized depreciation of approximately $259,000.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Diversified		32.8	%
Retail		24.4
Office		23.3
Lodging/Resorts		8.2
Residential		8.1
Other*		3.2
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.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Concentrated Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $4,824)	$	4,565
Investment in Security of Affiliated Issuer, at Value (Cost $63)		63
Total Investments in Securities, at Value (Cost $4,887)		4,628
Foreign Currency, at Value (Cost $4)		4
Due from Adviser		76
Dividends Receivable		17
Receivable for Investments Sold		5
Tax Reclaim Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		59
Total Assets		4,789
Liabilities:
Payable for Professional Fees		46
Payable for Offering Costs		44
Payable for Investments Purchased		3
Payable for Custodian Fees		1
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		—	@
Other Liabilities		3
Total Liabilities		97
Net Assets	$	4,692
Net Assets Consist of:
Paid-in-Capital	$	4,929
Total Accumulated Loss		(237	)
Net Assets	$	4,692
CLASS I:
Net Assets	$	4,665
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		497,000
Net Asset Value, Offering and Redemption Price Per Share	$	9.38
CLASS A:
Net Assets	$	9
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Redemption Price Per Share	$	9.37
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.52
Maximum Offering Price Per Share	$	9.89
CLASS C:
Net Assets	$	9
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	9.33
CLASS IS:
Net Assets	$	9
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	9.39

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Concentrated Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $4 of Foreign Taxes Withheld)	$	92
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		93
Expenses:
Offering Costs		81
Professional Fees		50
Advisory Fees (Note B)		18
Custodian Fees (Note F)		12
Shareholder Reporting Fees		7
Registration Fees		6
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Administration Fees (Note C)		2
Pricing Fees		2
Directors' Fees and Expenses		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		8
Total Expenses		191
Expenses Reimbursed by Adviser (Note B)		(147	)
Waiver of Advisory Fees (Note B)		(18	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		23
Net Investment Income		70
Realized Gain:
Investments Sold		1
Foreign Currency Translation		—	@
Net Realized Gain		1
Change in Unrealized Appreciation (Depreciation):
Investments		299
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		299
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		300
Net Increase in Net Assets Resulting from Operations	$	370

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Concentrated Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)		Period from June 18, 2018^ to December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	70	$	115
Net Realized Gain (Loss)		1		(23	)
Net Change in Unrealized Appreciation (Depreciation)		299		(558	)
Net Increase (Decrease) in Net Assets Resulting from Operations		370		(466	)
Dividends and Distributions to Shareholders:
Class I		—		(141	)
Class A		—		(—	@)
Class C		—		(—	@)
Class IS		—		(—	@)
Paid-in-Capital:
Class I		—		(71	)
Class A		—		(—	@)
Class C		—		(—	@)
Class IS		—		(—	@)
Total Dividends and Distributions to Shareholders		—		(212	)
Capital Share Transactions:(1)
Class I:
Subscribed		—		4,970
Class A:
Subscribed		—		10
Class C:
Subscribed		—		10
Class IS:
Subscribed		—		10
Net Increase in Net Assets Resulting from Capital Share Transactions		—		5,000
Total Increase in Net Assets		370		4,322
Net Assets:
Beginning of Period		4,322		—
End of Period	$	4,692	$	4,322
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		—		497
Class A:
Shares Subscribed		—		1
Class C:
Shares Subscribed		—		1
Class IS:
Shares Subscribed		—		1

^  Commencement of Operations.

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Concentrated Real Estate Portfolio

	Class I
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	8.64		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.14			0.23
Net Realized and Unrealized Gain (Loss)		0.60			(1.16	)
Total from Investment Operations		0.74			(0.93	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.29	)
Paid-in-Capital		—			(0.14	)
Total Distributions		—			(0.43	)
Net Asset Value, End of Period	$	9.38		$	8.64
Total Return(3)		8.56	%(6)		(9.49	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	4,665		$	4,295
Ratio of Expenses Before Expense Limitation		7.89	%(7)		8.58	%(7)
Ratio of Expenses After Expense Limitation		0.93	%(4)(7)		0.94	%(4)(7)
Ratio of Net Investment Income		2.98	%(4)(7)		4.42	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)(7)
Portfolio Turnover Rate		15	%(6)		19	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Concentrated Real Estate Portfolio

	Class A
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	8.65		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.12			0.21
Net Realized and Unrealized Gain (Loss)		0.60			(1.15	)
Total from Investment Operations		0.72			(0.94	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.27	)
Paid-in-Capital		—			(0.14	)
Total Distributions		—			(0.41	)
Net Asset Value, End of Period	$	9.37		$	8.65
Total Return(3)		8.32	%(6)		(9.57	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9		$	9
Ratio of Expenses Before Expense Limitation		25.10	%(7)		26.73	%(7)
Ratio of Expenses After Expense Limitation		1.30	%(4)(7)		1.30	%(4)(7)
Ratio of Net Investment Income		2.61	%(4)(7)		4.06	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)(7)
Portfolio Turnover Rate		15	%(6)		19	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Concentrated Real Estate Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	8.65		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.09			0.17
Net Realized and Unrealized Gain (Loss)		0.59			(1.15	)
Total from Investment Operations		0.68			(0.98	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.23	)
Paid-in-Capital		—			(0.14	)
Total Distributions		—			(0.37	)
Net Asset Value, End of Period	$	9.33		$	8.65
Total Return(3)		7.86	%(6)		(9.94	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9		$	9
Ratio of Expenses Before Expense Limitation		25.87	%(7)		27.50	%(7)
Ratio of Expenses After Expense Limitation		2.05	%(4)(7)		2.05	%(4)(7)
Ratio of Net Investment Income		1.86	%(4)(7)		3.30	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)(7)
Portfolio Turnover Rate		15	%(6)		19	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Concentrated Real Estate Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	8.64		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.14			0.23
Net Realized and Unrealized Gain (Loss)		0.61			(1.16	)
Total from Investment Operations		0.75			(0.93	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.29	)
Paid-in-Capital		—			(0.14	)
Total Distributions		—			(0.43	)
Net Asset Value, End of Period	$	9.39		$	8.64
Total Return(3)		8.68	%(6)		(9.47	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9		$	9
Ratio of Expenses Before Expense Limitation		24.82	%(7)		26.46	%(7)
Ratio of Expenses After Expense Limitation		0.90	%(4)(7)		0.90	%(4)(7)
Ratio of Net Investment Income		3.02	%(4)(7)		4.45	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)(7)
Portfolio Turnover Rate		15	%(6)		19	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Concentrated Real Estate Portfolio. The Fund seeks to provide current income and long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued

at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), effective April 30, 2019, MSIM Company and MSIM Limited are no longer Sub-Advisers

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

to the Fund, each a wholly-owned subsidiary of Morgan Stanley, 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 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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Fund invests a significant portion of its assets in securities of real estate investment trusts ("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 Fund.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's investments as of June 30, 2019:

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	$	317	$	1,202	$	—	$	1,519
Health Care		17		—		—		17
Industrial		27		1		—		28
Lodging/Resorts		277		103		—		380
Office		629		450		—		1,079
Residential		332		44		—		376
Retail		663		466		—		1,129
Self Storage		37		—		—		37
Total Common Stocks		2,299		2,266		—		4,565
Short-Term Investment
Investment Company		63		—		—		63
Total Assets	$	2,362	$	2,266	$	—	$	4,628

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Indemnifications: The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

or losses pursuant to these contracts and expects the risk of loss to be remote.

5.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund 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.

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

First $2 billion			Over $2 billion
	0.75	%		0.70	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.95% for Class I shares, 1.30% for Class A shares, 2.05% for Class C shares and 0.90% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2019, approximately $18,000 of advisory fees were waived and approximately $151,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

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

Effective April 30, 2019, MSIM Company and MSIM Limited are no longer Sub-Advisers to the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $672,000 and $712,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

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

its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	10	$	516	$	463	$	1

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	63

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. The tax year ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal year 2018 was as follows:

2018 Distributions Paid From:
Ordinary Income (000)		Pain-in- Capital (000)
$	141	$	71

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 a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)			Paid-in- Capital (000)
$	—	@	$	(—	@)

@ Amount is less than $500.

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $12,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund did not have record owners of 10% or greater.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the period since the end of June 2018, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's contractual management fee was higher than its peer group average and its actual management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

20

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

21

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

23

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGCRESAN
2663863 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Counterpoint Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	8
Statement of Operations	9
Statements of Changes in Net Assets	10
Financial Highlights	11
Notes to Financial Statements	15
Investment Advisory Agreement Approval	23
Privacy Notice	25
Director and Officer Information	27

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Counterpoint Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Counterpoint Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Counterpoint Portfolio Class I	$	1,000.00	$	1,296.70	$	1,019.69	$	5.87	$	5.16		1.03	%
Global Counterpoint Portfolio Class A		1,000.00		1,292.80		1,017.90		7.90		6.95		1.39
Global Counterpoint Portfolio Class C		1,000.00		1,289.30		1,014.18		12.15		10.69		2.14
Global Counterpoint Portfolio Class IS		1,000.00		1,296.70		1,019.89		5.64		4.96		0.99

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Counterpoint Portfolio

	Shares		Value (000)
Common Stocks (96.5%)
Argentina (0.4%)
Globant SA (a)		314	$	32
Australia (0.4%)
Bellamy's Australia Ltd. (a)		338		2
Brookfield Infrastructure Partners LP		600		26
				28
Brazil (0.3%)
B3 SA — Brasil Bolsa Balcao		1,132		11
Magazine Luiza SA		228		13
				24
Canada (3.9%)
Brookfield Asset Management, Inc., Class A		1,234		59
Canadian National Railway Co.		646		60
Colliers International Group, Inc.		122		8
Constellation Software, Inc.		90		85
Shopify, Inc., Class A (a)		256		77
				289
China (8.6%)
Alibaba Group Holding Ltd. ADR (a)		154		26
China Resources Beer Holdings Co., Ltd. (b)		10,000		47
Ctrip.com International Ltd. ADR (a)		1,000		37
Foshan Haitian Flavouring & Food Co., Ltd., Class A		6,000		92
Hangzhou Tigermed Consulting Co. Ltd., Class A		800		9
Huazhu Group Ltd. ADR		863		31
HUYA, Inc. ADR (a)		1,309		32
Inner Mongolia Yili Industrial Group Co., Ltd., Class A		1,200		6
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd., Class A		2,600		46
Kweichow Moutai Co., Ltd., Class A		200		29
Meituan Dianping, Class B (a)(b)		6,900		61
Shenzhou International Group Holdings Ltd. (b)		2,200		30
TAL Education Group ADR (a)		4,489		171
Tencent Holdings Ltd. (b)		500		23
				640
Denmark (2.1%)
Chr Hansen Holding A/S		373		35
DSV A/S		1,261		124
				159
France (7.0%)
Christian Dior SE		185		97
Danone SA		126		11
EssilorLuxottica SA		541		71
Getlink SE		1,108		18
Hermes International		241		174
L'Oreal SA		254		72
LVMH Moet Hennessy Louis Vuitton SE		32		13
Pernod Ricard SA		176		32
Remy Cointreau SA		131		19
Safran SA		87		13
				520

	Shares		Value (000)
Germany (0.7%)
Adidas AG		19	$	6
CompuGroup Medical SE		71		6
GRENKE AG		28		3
Nemetschek SE		77		5
Rational AG		11		7
Zalando SE (a)		598		26
				53
Hong Kong (1.8%)
AIA Group Ltd.		3,800		41
China East Education Holdings Ltd. (a)		10,500		15
Haidilao International Holding Ltd. (c)		12,000		50
Hong Kong Exchanges & Clearing Ltd.		800		28
				134
India (3.0%)
HDFC Bank Ltd. ADR		1,747		227
Israel (0.1%)
Wix.com Ltd. (a)		42		6
Italy (1.8%)
Brunello Cucinelli SpA		652		22
Moncler SpA		2,707		116
				138
Japan (1.1%)
Calbee, Inc.		1,300		35
Nihon M&A Center, Inc.		500		12
Pigeon Corp.		800		32
Yume No Machi Souzou Iinkai Co. Ltd.		300		5
				84
Korea, Republic of (0.5%)
NAVER Corp.		360		35
Mexico (0.3%)
Grupo Aeroportuario del Sureste SAB de CV, Class B		1,425		23
Netherlands (1.1%)
Adyen N.V. (a)		68		53
ASML Holding N.V.		126		26
				79
New Zealand (0.5%)
Ryman Healthcare Ltd.		804		6
Xero Ltd. (a)		833		35
				41
Philippines (0.1%)
Jollibee Foods Corp.		1,240		7
South Africa (0.1%)
Discovery Ltd.		251		3
Naspers Ltd., Class N		17		4
				7
Spain (0.3%)
Aena SME SA		96		19

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Counterpoint Portfolio

	Shares		Value (000)
Sweden (0.5%)
AddLife AB, Class B		110	$	4
Cellavision AB		92		3
Vitrolife AB		1,486		29
				36
Switzerland (0.4%)
Kuehne & Nagel International AG (Registered)		108		16
Schindler Holding AG		53		12
				28
Taiwan (0.8%)
Nien Made Enterprise Co., Ltd.		1,000		7
Taiwan Semiconductor Manufacturing Co., Ltd.		3,000		23
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		789		31
				61
Turkey (0.0%)
Ulker Biskuvi Sanayi AS (a)		615		2
United Kingdom (3.5%)
ASA International Group PLC		665		3
Atlassian Corp., PLC, Class A (a)		45		6
Blue Prism Group plc (a)		213		4
Compass Group PLC		798		19
Diageo PLC		531		23
Fevertree Drinks PLC		1,213		36
Halma PLC		100		2
Just Eat PLC (a)		641		5
Melrose Industries PLC		2,018		5
Metro Bank PLC (a)		310		2
Reckitt Benckiser Group PLC		431		34
Rentokil Initial PLC		14,267		72
Rightmove PLC		5,832		40
Victoria PLC (a)		1,222		7
				258
United States (57.2%)
Adaptive Biotechnologies Corp. (a)		68		3
Adobe, Inc. (a)		276		81
Alnylam Pharmaceuticals, Inc. (a)		116		8
Alphabet, Inc., Class C (a)		62		67
Amazon.com, Inc. (a)		154		292
Anaplan, Inc. (a)		132		7
Appfolio, Inc., Class A (a)		29		3
Appian Corp. (a)		324		12
Autodesk, Inc. (a)		36		6
Avalara, Inc. (a)		676		49
Ball Corp.		468		33
Booking Holdings, Inc. (a)		40		75
Broadridge Financial Solutions, Inc.		577		74
Brown-Forman Corp., Class B		222		12
Carvana Co. (a)		314		20
CEVA, Inc. (a)		186		5
Chegg, Inc. (a)		371		14
Chewy, Inc., Class A (a)		378		13
Cimpress N.V. (a)		25		2

	Shares		Value (000)
Cintas Corp.		56	$	13
Copart, Inc. (a)		1,030		77
Coupa Software, Inc. (a)		699		88
Covetrus, Inc. (a)		1,117		27
Danaher Corp.		45		6
DexCom, Inc. (a)		239		36
Ecolab, Inc.		741		146
Editas Medicine, Inc. (a)		77		2
Elanco Animal Health, Inc. (a)		836		28
Elastic N.V. (a)		186		14
EPAM Systems, Inc. (a)		641		111
Estee Lauder Cos., Inc. (The), Class A		162		30
Etsy, Inc. (a)		227		14
EVI Industries, Inc.		164		6
Exact Sciences Corp. (a)		71		8
Facebook, Inc., Class A (a)		254		49
Farfetch Ltd., Class A (a)		3,960		82
Fastly, Inc., Class A (a)		132		3
Fortive Corp.		128		10
Gartner, Inc. (a)		404		65
Goosehead Insurance, Inc., Class A		97		5
GrubHub, Inc. (a)		124		10
GTT Communications, Inc. (a)		451		8
Guardant Health, Inc. (a)		528		46
HealthEquity, Inc. (a)		314		21
HEICO Corp.		66		9
HEICO Corp., Class A		488		50
Illumina, Inc. (a)		187		69
Inspire Medical Systems, Inc. (a)		596		36
Installed Building Products, Inc. (a)		52		3
Instructure, Inc. (a)		146		6
Intellia Therapeutics, Inc. (a)		114		2
Intersect ENT, Inc. (a)		215		5
Intuit, Inc.		22		6
Intuitive Surgical, Inc. (a)		325		170
Invitae Corp. (a)		125		3
LendingTree, Inc. (a)		33		14
LivaNova PLC (a)		28		2
LiveRamp Holdings, Inc. (a)		445		22
MakeMyTrip Ltd. (a)		639		16
MarketAxess Holdings, Inc.		23		7
Martin Marietta Materials, Inc.		131		30
Mastercard, Inc., Class A		324		86
Match Group, Inc.		100		7
McCormick & Co., Inc.		81		13
MercadoLibre, Inc. (a)		183		112
Moderna, Inc. (a)		367		5
MongoDB, Inc. (a)		582		89
MSCI, Inc.		207		49
NanoString Technologies, Inc. (a)		1,314		40
Netflix, Inc. (a)		93		34
NVIDIA Corp.		36		6
Okta, Inc. (a)		237		29

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Counterpoint Portfolio

	Shares		Value (000)
United States (cont'd)
Overstock.com, Inc. (a)		1,135	$	15
Pagerduty, Inc. (a)		126		6
Penumbra, Inc. (a)		177		28
Pinterest, Inc., Class A (a)		345		9
Quotient Ltd. (a)		725		7
RealReal, Inc. (The) (a)		200		6
Redfin Corp. (a)		336		6
Roku, Inc. (a)		310		28
Rollins, Inc.		2,049		73
S&P Global, Inc.		216		49
salesforce.com, Inc. (a)		320		49
Service Corp. International		278		13
ServiceMaster Global Holdings, Inc. (a)		995		52
ServiceNow, Inc. (a)		378		104
Sherwin-Williams Co. (The)		39		18
Shockwave Medical, Inc. (a)		102		6
Slack Technologies, Inc., Class A (a)		1,535		58
Smartsheet, Inc., Class A (a)		1,201		58
Snap, Inc., Class A (a)		296		4
Spotify Technology SA (a)		1,043		153
Square, Inc., Class A (a)		361		26
SS&C Technologies Holdings, Inc.		42		2
Starbucks Corp.		75		6
Stitch Fix, Inc., Class A (a)		423		14
Trade Desk, Inc. (The), Class A (a)		140		32
Trupanion, Inc. (a)		201		7
Twilio, Inc., Class A (a)		598		82
Twitter, Inc. (a)		3,211		112
Uber Technologies, Inc. (a)		1,289		60
Ubiquiti Networks, Inc.		37		5
Union Pacific Corp.		55		9
UnitedHealth Group, Inc.		32		8
Upwork, Inc. (a)		877		14
Vail Resorts, Inc.		136		30
Veeva Systems, Inc., Class A (a)		471		76
Verisk Analytics, Inc.		288		42
Visa, Inc., Class A		260		45
Vulcan Materials Co.		129		18
Walt Disney Co. (The)		1,074		150
Waste Connections, Inc.		446		43

	Shares		Value (000)
Wayfair, Inc., Class A (a)		240	$	35
Workday, Inc., Class A (a)		271		56
XPO Logistics, Inc. (a)		137		8
Zillow Group, Inc., Class A (a)		259		12
Zillow Group, Inc., Class C (a)		211		10
Zoetis, Inc.		206		23
Zoom Video Communications, Inc., Class A (a)		49		4
				4,272
Total Common Stocks (Cost $6,144)				7,202
Short-Term Investment (5.1%)
Investment Company (5.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $380)		380,326		380
Total Investments Excluding Purchased Options (101.6%) (Cost $6,524)				7,582
Total Purchased Options Outstanding (0.1%) (Cost $25)				8
Total Investments (101.7%) (Cost $6,549) (d)(e)				7,590
Liabilities in Excess of Other Assets (–1.7%)				(127	)
Net Assets (100.0%)			$	7,463

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

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

(d)  The approximate fair value and percentage of net assets, $1,954,000 and 26.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $1,222,000 and the aggregate gross unrealized depreciation is approximately $181,000, resulting in net unrealized appreciation of approximately $1,041,000.

ADR  American Depositary Receipt.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2019:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
JPMorgan Chase Bank NA	USD/CNH	$	7.62	Jan-20		1,200,000		1,200	$	2		$	4	$	(2	)
Royal Bank of Scotland	USD/CNH		8.03	Oct-19		1,157,619		1,158		1			7		(6	)
Royal Bank of Scotland	USD/CNH		7.57	Jul-19		1,647,300		1,647		—	@		7		(7	)
JPMorgan Chase Bank NA	USD/CNH		7.86	Jun-20		1,534,000		1,534		5			7		(2	)
									$	8		$	25	$	(17	)

@     Value is less than $500.

CNH — Chinese Yuan Renminbi Offshore

USD — United States Dollar

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Counterpoint Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Other*		56.0	%
Internet & Direct Marketing Retail		11.2
Software		10.6
Information Technology Services		10.2
Textiles, Apparel & Luxury Goods		7.0
Short-Term Investment		5.0
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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Counterpoint Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $6,169)	$	7,210
Investment in Security of Affiliated Issuer, at Value (Cost $380)		380
Total Investments in Securities, at Value (Cost $6,549)		7,590
Foreign Currency, at Value (Cost $7)		7
Cash		1
Receivable for Investments Sold		113
Due from Adviser		80
Dividends Receivable		4
Tax Reclaim Receivable		1
Receivable from Affiliate		1
Other Assets		53
Total Assets		7,850
Liabilities:
Payable for Investments Purchased		177
Payable for Offering Costs		162
Payable for Professional Fees		41
Payable for Custodian Fees		4
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Administration Fees		—	@
Other Liabilities		3
Total Liabilities		387
Net Assets	$	7,463
Net Assets Consist of:
Paid-in-Capital	$	6,749
Total Distributable Earnings		714
Net Assets	$	7,463
CLASS I:
Net Assets	$	7,430
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		677,195
Net Asset Value, Offering and Redemption Price Per Share	$	10.97
CLASS A:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Redemption Price Per Share	$	10.96
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.61
Maximum Offering Price Per Share	$	11.57
CLASS C:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	10.92
CLASS IS:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	10.97

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Counterpoint Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $4 of Foreign Taxes Withheld)	$	26
Dividends from Security of Affiliated Issuer (Note G)		3
Total Investment Income		29
Expenses:
Offering Costs		82
Professional Fees		47
Advisory Fees (Note B)		27
Custodian Fees (Note F)		26
Shareholder Reporting Fees		7
Registration Fees		6
Pricing Fees		5
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Administration Fees (Note C)		3
Directors' Fees and Expenses		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		7
Total Expenses		215
Expenses Reimbursed by Adviser (Note B)		(151	)
Waiver of Advisory Fees (Note B)		(27	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		34
Net Investment Loss		(5	)
Realized Gain (Loss):
Investments Sold		129
Foreign Currency Translation		(—	@)
Net Realized Gain		129
Change in Unrealized Appreciation (Depreciation):
Investments		1,582
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		1,582
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		1,711
Net Increase in Net Assets Resulting from Operations	$	1,706

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Counterpoint Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Period from June 29, 2018^ to December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(5	)	$	(19	)
Net Realized Gain (Loss)		129			(411	)
Net Change in Unrealized Appreciation (Depreciation)		1,582			(541	)
Net Increase (Decrease) in Net Assets Resulting from Operations		1,706			(971	)
Dividends and Distributions to Shareholders:
Class I		—			(21	)
Class A		—			(—	@)
Class C		—			(—	@)
Class IS		—			(—	@)
Paid-in-Capital:
Class I		—			(50	)
Class A		—			(—	@)
Class C		—			(—	@)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(71	)
Capital Share Transactions:(1)
Class I:
Subscribed		—			6,750
Distributions Reinvested		—			19
Class A:
Subscribed		—			10
Class C:
Subscribed		—			10
Class IS:
Subscribed		—			10
Net Increase in Net Assets Resulting from Capital Share Transactions		—			6,799
Total Increase in Net Assets		1,706			5,757
Net Assets:
Beginning of Period		5,757			—
End of Period	$	7,463		$	5,757
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		—			675
Shares Issued on Distributions Reinvested		—			2
Net Increase in Class I Shares Outstanding		—			677
Class A:
Shares Subscribed		—			1
Class C:
Shares Subscribed		—			1
Class IS:
Shares Subscribed		—			1

^  Commencement of Operations.

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Counterpoint Portfolio

	Class I
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 29, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	8.46		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		2.52			(1.41	)
Total from Investment Operations		2.51			(1.44	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.03	)
Paid-in-Capital		—			(0.07	)
Total Distributions		—			(0.10	)
Net Asset Value, End of Period	$	10.97		$	8.46
Total Return(3)		29.67	%(5)		(14.36	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7,430		$	5,733
Ratio of Expenses Before Expense Limitation		6.30	%(6)		6.83	%(6)
Ratio of Expenses After Expense Limitation		1.03	%(4)(6)		1.03	%(4)(6)
Ratio of Net Investment Loss		(0.16	)%(4)(6)		(0.54	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		42	%(5)		54	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Counterpoint Portfolio

	Class A
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 29, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	8.47		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.03	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		2.52			(1.40	)
Total from Investment Operations		2.49			(1.44	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.03	)
Paid-in-Capital		—			(0.06	)
Total Distributions		—			(0.09	)
Net Asset Value, End of Period	$	10.96		$	8.47
Total Return(3)		29.28	%(5)		(14.44	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	8
Ratio of Expenses Before Expense Limitation		23.11	%(6)		26.82	%(6)
Ratio of Expenses After Expense Limitation		1.39	%(4)(6)		1.39	%(4)(6)
Ratio of Net Investment Loss		(0.52	)%(4)(6)		(0.91	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		42	%(5)		54	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Counterpoint Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 29, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	8.47		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.06	)		(0.08	)
Net Realized and Unrealized Gain (Loss)		2.51			(1.40	)
Total from Investment Operations		2.45			(1.48	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.02	)
Paid-in-Capital		—			(0.03	)
Total Distributions		—			(0.05	)
Net Asset Value, End of Period	$	10.92		$	8.47
Total Return(3)		28.93	%(5)		(14.80	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	8
Ratio of Expenses Before Expense Limitation		23.83	%(6)		27.44	%(6)
Ratio of Expenses After Expense Limitation		2.14	%(4)(6)		2.14	%(4)(6)
Ratio of Net Investment Loss		(1.27	)%(4)(6)		(1.66	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		42	%(5)		54	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Counterpoint Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 29, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	8.46		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)		(0.02	)
Net Realized and Unrealized Gain (Loss)		2.52			(1.41	)
Total from Investment Operations		2.51			(1.43	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.03	)
Paid-in-Capital		—			(0.08	)
Total Distributions		—			(0.11	)
Net Asset Value, End of Period	$	10.97		$	8.46
Total Return(3)		29.67	%(5)		(14.34	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	8
Ratio of Expenses Before Expense Limitation		22.80	%(6)		26.39	%(6)
Ratio of Expenses After Expense Limitation		0.99	%(4)(6)		0.99	%(4)(6)
Ratio of Net Investment Loss		(0.11	)%(4)(6)		(0.51	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		42	%(5)		54	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Counterpoint Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices

if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (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 its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (5) when market quotations are not readily available, including

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	59	$	13	$	—	$	72
Air Freight & Logistics		8		—		—		8
Banks		227		2		—		229
Beverages		12		232		—		244
Biotechnology		28		29		—		57
Capital Markets		175		28		—		203
Chemicals		164		35		—		199
Commercial Services & Supplies		208		72		—		280
Communications Equipment		5		—		—		5
Construction Materials		48		—		—		48
Consumer Finance		—		3		—		3
Containers & Packaging		33		—		—		33
Diversified Consumer Services		265		—		—		265
Diversified Financial Services		—		3		—		3
Electrical Equipment		—		5		—		5
Electronic Equipment, Instruments & Components		—		2		—		2
Entertainment		369		—		—		369
Food Products		13		148		—		161
Health Care Equipment & Supplies		255		3		—		258
Health Care Providers & Services		102		6		—		108
Health Care Technology		112		6		—		118
Hotels, Restaurants & Leisure		67		76		—		143
Household Durables		31		14		—		45
Household Products		—		66		—		66
Information Technology Services		723		53		—		776
Insurance		12		44		—		56
Interactive Media & Services		270		98		—		368
Internet & Direct Marketing Retail		747		101		—		848
Life Sciences Tools & Services		112		13		—		125
Machinery		10		19		—		29
Marine		—		16		—		16
Multi-Line Retail		13		—		—		13
Multi-Utilities		26		—		—		26
Personal Products		30		72		—		102
Pharmaceuticals		56		—		—		56
Professional Services		56		12		—		68
Real Estate Management & Development		14		—		—		14

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)
Road & Rail	$	129	$	124	$	—	$	253
Semiconductors & Semiconductor Equipment		42		49		—		91
Software		764		44		—		808
Specialty Retail		20		—		—		20
Textiles, Apparel & Luxury Goods		—		529		—		529
Thrifts & Mortgage Finance		14		—		—		14
Trading Companies & Distributors		6		—		—		6
Transportation Infrastructure		23		37		—		60
Total Common Stocks		5,248		1,954		—		7,202
Call Options Purchased		—		8		—		8
Short-Term Investment
Investment Company		380		—		—		380
Total Assets	$	5,628	$	1,962	$	—	$	7,590

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund 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 in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund 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 Fund 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" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	8	(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 Fund's change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$(9)(b)

(b) Amounts are included in Investments in the Statement of Operations.

At June 30, 2019, the Fund'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)
Purchased Options	$	8	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(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 Fund 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 Fund 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 potential 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 Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
JPMorgan Chase Bank NA	$	7		$	—	$	—	$	7
Royal Bank of Scotland		1			—		—		1
Total	$	8	(a)	$	—	$	—	$	8

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the six months ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	4,261,000

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

6.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends

which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund 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, 1.40% for Class A shares, 2.15% for Class C shares and 1.00% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $27,000 of advisory fees were waived and approximately $154,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Street"), State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019,

purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $2,792,000 and $2,907,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	212	$	884	$	716	$	3

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	380

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. The tax year ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal year 2018 was as follows:

2018 Distributions Paid From:
Ordinary Income (000)		Paid-in- Capital (000)
$	21	$	50

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 a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)			Paid-in- Capital (000)
$	—	@	$	(—	@)

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $313,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)			Post-October Capital Losses (000)
$	—	@	$	—

@ Amount is less than $500.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund did not have record owners of 10% or greater.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the period since the end of June 2018, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's contractual management fee was higher than its peer group average and the actual management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

24

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

25

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

27

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGCPTSAN
2663874 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Core Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	9
Notes to Financial Statements	13
Investment Advisory Agreement Approval	18
Privacy Notice	20
Director and Officer Information	22

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Core Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Core Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Core Portfolio Class I	$	1,000.00	$	1,183.30	$	1,019.84	$	5.41	$	5.01		1.00	%
Global Core Portfolio Class A		1,000.00		1,180.30		1,018.10		7.30		6.76		1.35
Global Core Portfolio Class C		1,000.00		1,175.60		1,014.38		11.33		10.49		2.10
Global Core Portfolio Class IS		1,000.00		1,183.30		1,020.08		5.14		4.76		0.95

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Core Portfolio

	Shares		Value (000)
Common Stocks (96.6%)
Brazil (1.3%)
Cia Energetica de Minas Gerais ADR		34,520	$	131
China (11.7%)
Alibaba Group Holding Ltd. ADR (a)		2,926		496
NetEase, Inc. ADR		585		149
Tencent Holdings Ltd. ADR		12,498		566
				1,211
France (5.6%)
Airbus SE ADR		2,840		100
LVMH Moet Hennessy Louis Vuitton SE		1,136		484
				584
India (0.8%)
HDFC Bank Ltd. ADR		644		84
Ireland (2.5%)
Ryanair Holdings PLC ADR (a)		3,996		256
Japan (1.2%)
SoftBank Group Corp. ADR		2,481		119
Panama (1.3%)
Copa Holdings SA, Class A		1,393		136
Spain (2.9%)
Banco Santander SA ADR		64,385		295
Switzerland (0.9%)
Logitech International SA (Registered)		2,396		95
Taiwan (2.3%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		6,014		236
United Kingdom (7.6%)
Diageo PLC ADR		3,532		609
Royal Dutch Shell PLC ADR		2,801		182
				791
United States (58.5%)
American Electric Power Co., Inc.		1,403		123
Ameriprise Financial, Inc.		1,621		235
Apple, Inc.		2,172		430
Cigna Corp. (a)		415		65
Comcast Corp., Class A		4,427		187
Constellation Brands, Inc., Class A		217		43
Danaher Corp.		2,180		312
Diamondback Energy, Inc.		1,837		200
Emerson Electric Co.		1,476		98
Essex Property Trust, Inc. REIT		691		202
Estee Lauder Cos., Inc. (The), Class A		1,309		240
Extra Space Storage, Inc. REIT		1,456		154
Ferrari N.V.		1,325		214
Fortune Brands Home & Security, Inc.		1,147		66
JPMorgan Chase & Co.		3,477		389
Lennar Corp., Class A		4,377		212
Mastercard, Inc., Class A		2,757		729
McDonald's Corp.		737		153
Microsoft Corp.		2,474		331
Monster Beverage Corp. (a)		856		55

	Shares		Value (000)
NextEra Energy, Inc.		1,012	$	207
Northern Trust Corp.		1,250		113
Palo Alto Networks, Inc. (a)		941		192
PayPal Holdings, Inc. (a)		281		32
Starbucks Corp.		769		64
STORE Capital Corp. REIT		6,988		232
SVB Financial Group (a)		1,056		237
Target Corp.		757		66
VMware, Inc., Class A		1,852		310
Welltower, Inc. REIT		1,945		159
				6,050
Total Common Stocks (Cost $8,073)				9,988
Investment Company (2.6%)
Vanguard FTSE Europe ETF (Cost $269)		4,915		270
Short-Term Investment (0.5%)
Investment Company (0.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $51)		50,963		51
Total Investments (99.7%) (Cost $8,393) (b)(c)				10,309
Other Assets in Excess of Liabilities (0.3%)				34
Net Assets (100.0%)			$	10,343

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  The approximate fair value and percentage of net assets, $484,000 and 4.7%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $2,077,000 and the aggregate gross unrealized depreciation is approximately $161,000, resulting in net unrealized appreciation of approximately $1,916,000.

ADR  American Depositary Receipt.

ETF  Exchange Traded Fund.

REIT  Real Estate Investment Trust.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Core Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Other*		48.7	%
Banks		9.7
Software		8.1
Information Technology Services		7.4
Equity Real Estate Investment Trusts (REITs)		7.2
Interactive Media & Services		6.9
Beverages		6.9
Tech Hardware, Storage & Peripherals		5.1
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.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Core Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $8,342)	$	10,258
Investment in Security of Affiliated Issuer, at Value (Cost $51)		51
Total Investments in Securities, at Value (Cost $8,393)		10,309
Due from Adviser		19
Dividends Receivable		15
Tax Reclaim Receivable		3
Receivable from Affiliate		—	@
Other Assets		62
Total Assets		10,408
Liabilities:
Payable for Professional Fees		46
Payable for Fund Shares Redeemed		12
Payable for Sub Transfer Agency Fees — Class I		1
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		1
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Custodian Fees		1
Payable for Administration Fees		1
Other Liabilities		3
Total Liabilities		65
Net Assets	$	10,343
Net Assets Consist of:
Paid-in-Capital	$	8,555
Total Distributable Earnings		1,788
Net Assets	$	10,343
CLASS I:
Net Assets	$	7,159
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		596,141
Net Asset Value, Offering and Redemption Price Per Share	$	12.01
CLASS A:
Net Assets	$	1,903
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		158,814
Net Asset Value, Redemption Price Per Share	$	11.98
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.66
Maximum Offering Price Per Share	$	12.64
CLASS C:
Net Assets	$	1,269
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		107,682
Net Asset Value, Offering and Redemption Price Per Share	$	11.78
CLASS IS:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	12.01

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Core Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $3 of Foreign Taxes Withheld)	$	91
Dividends from Security of Affiliated Issuer (Note G)		1
Total Investment Income		92
Expenses:
Professional Fees		49
Advisory Fees (Note B)		37
Registration Fees		20
Shareholder Services Fees — Class A (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		7
Shareholder Reporting Fees		5
Administration Fees (Note C)		4
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Custodian Fees (Note F)		3
Directors' Fees and Expenses		3
Sub Transfer Agency Fees — Class I		1
Sub Transfer Agency Fees — Class A		—	@
Sub Transfer Agency Fees — Class C		—	@
Pricing Fees		1
Other Expenses		5
Total Expenses		141
Expenses Reimbursed by Adviser (Note B)		(43	)
Waiver of Advisory Fees (Note B)		(37	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		60
Net Investment Income		32
Realized Gain:
Investments Sold		172
Foreign Currency Translation		—	@
Net Realized Gain		172
Change in Unrealized Appreciation (Depreciation):
Investments		1,422
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		1,594
Net Increase in Net Assets Resulting from Operations	$	1,626

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Core Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	32		$	103
Net Realized Gain		172			35
Net Change in Unrealized Appreciation (Depreciation)		1,422			(2,135	)
Net Increase (Decrease) in Net Assets Resulting from Operations		1,626			(1,997	)
Dividends and Distributions to Shareholders:
Class I		—			(54	)
Class A		—			(4	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(58	)
Capital Share Transactions:(1)
Class I:
Subscribed		52			743
Distributions Reinvested		—			15
Redeemed		(769	)		(2,928	)
Class A:
Subscribed		741			340
Distributions Reinvested		—			4
Redeemed		(422	)		(691	)
Class C:
Subscribed		21			422
Redeemed		(285	)		(89	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(662	)		(2,184	)
Total Increase (Decrease) in Net Assets		964			(4,239	)
Net Assets:
Beginning of Period		9,379			13,618
End of Period	$	10,343		$	9,379
(1) Capital Share Transactions:
Class I:
Shares Subscribed		4			60
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(72	)		(250	)
Net Decrease in Class I Shares Outstanding		(68	)		(189	)
Class A:
Shares Subscribed		66			29
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(38	)		(60	)
Net Increase (Decrease) in Class A Shares Outstanding		28			(31	)
Class C:
Shares Subscribed		2			36
Shares Redeemed		(25	)		(8	)
Net Increase (Decrease) in Class C Shares Outstanding		(23	)		28

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Core Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.15		$	12.20		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.12			0.07			0.05
Net Realized and Unrealized Gain (Loss)		1.81			(2.09	)		2.16			0.06
Total from Investment Operations		1.86			(1.97	)		2.23			0.11
Distributions from and/or in Excess of:
Net Investment Income		—			(0.08	)		(0.06	)		(0.08	)
Paid-in-Capital		—			—			(0.00	)(3)		—
Total Distributions		—			(0.08	)		(0.06	)		(0.08	)
Net Asset Value, End of Period	$	12.01		$	10.15		$	12.20		$	10.03
Total Return(4)		18.33	%(7)		(16.15	)%		22.27	%		1.08	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	7,159		$	6,738		$	10,398		$	6,517
Ratio of Expenses Before Expense Limitation		2.62	%(8)		2.53	%		2.89	%		3.73	%(8)
Ratio of Expenses After Expense Limitation		1.00	%(5)(8)		1.00	%(5)		0.97	%(5)		0.98	%(5)(8)
Ratio of Net Investment Income		0.86	%(5)(8)		0.97	%(5)		0.64	%(5)		0.82	%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.01	%(8)
Portfolio Turnover Rate		35	%(7)		50	%		41	%		22	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Core Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.15		$	12.18		$	10.02		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.03			0.07			0.03			0.02
Net Realized and Unrealized Gain (Loss)		1.80			(2.07	)		2.15			0.06
Total from Investment Operations		1.83			(2.00	)		2.18			0.08
Distributions from and/or in Excess of:
Net Investment Income		—			(0.03	)		(0.02	)		(0.06	)
Paid-in-Capital		—			—			(0.00	)(3)		—
Total Distributions		—			(0.03	)		(0.02	)		(0.06	)
Net Asset Value, End of Period	$	11.98		$	10.15		$	12.18		$	10.02
Total Return(4)		18.03	%(7)		(16.41	)%		21.82	%		0.83	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,903		$	1,320		$	1,962		$	1,263
Ratio of Expenses Before Expense Limitation		2.97	%(8)		2.89	%		3.36	%		4.16	%(8)
Ratio of Expenses After Expense Limitation		1.35	%(5)(8)		1.35	%(5)		1.35	%(5)		1.35	%(5)(8)
Ratio of Net Investment Income		0.52	%(5)(8)		0.62	%(5)		0.25	%(5)		0.39	%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)(8)
Portfolio Turnover Rate		35	%(7)		50	%		41	%		22	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Core Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.02		$	12.08		$	10.00		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.02	)		(0.01	)		(0.06	)		(0.02	)
Net Realized and Unrealized Gain (Loss)		1.78			(2.05	)		2.15			0.06
Total from Investment Operations		1.76			(2.06	)		2.09			0.04
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.01	)		(0.04	)
Net Asset Value, End of Period	$	11.78		$	10.02		$	12.08		$	10.00
Total Return(3)		17.56	%(6)		(17.05	)%		20.92	%		0.41	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,269		$	1,311		$	1,246		$	901
Ratio of Expenses Before Expense Limitation		3.78	%(7)		3.65	%		4.19	%		5.02	%(7)
Ratio of Expenses After Expense Limitation		2.10	%(4)(7)		2.10	%(4)		2.10	%(4)		2.10	%(4)(7)
Ratio of Net Investment Loss		(0.27	)%(4)(7)		(0.05	)%(4)		(0.50	)%(4)		(0.36	)%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		35	%(6)		50	%		41	%		22	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Core Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.15		$	12.20		$	10.03		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.13			0.07			0.05
Net Realized and Unrealized Gain (Loss)		1.81			(2.09	)		2.17			0.06
Total from Investment Operations		1.86			(1.96	)		2.24			0.11
Distributions from and/or in Excess of:
Net Investment Income		—			(0.09	)		(0.07	)		(0.08	)
Paid-in-Capital		—			—			(0.00	)(3)		—
Total Distributions		—			(0.09	)		(0.07	)		(0.08	)
Net Asset Value, End of Period	$	12.01		$	10.15		$	12.20		$	10.03
Total Return(4)		18.33	%(7)		(16.10	)%		22.29	%		1.10	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12		$	10		$	12		$	10
Ratio of Expenses Before Expense Limitation		17.40	%(8)		19.09	%		18.67	%		19.70	%(8)
Ratio of Expenses After Expense Limitation		0.95	%(5)(8)		0.95	%(5)		0.95	%(5)		0.95	%(5)(8)
Ratio of Net Investment Income		0.91	%(5)(8)		1.06	%(5)		0.66	%(5)		0.84	%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)(8)
Portfolio Turnover Rate		35	%(7)		50	%		41	%		22	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Core Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (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

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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 Fund's investments as of June 30, 2019:

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	$	100	$	—	$	—	$	100
Airlines		392		—		—		392
Automobiles		214		—		—		214
Banks		1,005		—		—		1,005
Beverages		707		—		—		707
Building Products		66		—		—		66
Capital Markets		348		—		—		348
Electric Utilities		461		—		—		461
Electrical Equipment		98		—		—		98
Equity Real Estate Investment Trusts (REITs)		747		—		—		747

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (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)
Health Care Equipment & Supplies	$	312	$	—	$	—	$	312
Health Care Providers & Services		65		—		—		65
Hotels, Restaurants & Leisure		217		—		—		217
Household Durables		212		—		—		212
Information Technology Services		761		—		—		761
Interactive Media & Services		715		—		—		715
Internet & Direct Marketing Retail		496		—		—		496
Media		187		—		—		187
Multi-Line Retail		66		—		—		66
Oil, Gas & Consumable Fuels		382		—		—		382
Personal Products		240		—		—		240
Semiconductors & Semiconductor Equipment		236		—		—		236
Software		833		—		—		833
Tech Hardware, Storage & Peripherals		525		—		—		525
Textiles, Apparel & Luxury Goods		—		484		—		484
Wireless Telecommunication Services		119		—		—		119
Total Common Stocks		9,504		484		—		9,988
Investment Company		270		—		—		270
Short-Term Investment
Investment Company		51		—		—		51
Total Assets	$	9,825	$	484	$	—	$	10,309

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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

4.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $750 million			Next $750 million			Over $1.5 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $37,000 of advisory fees were waived and approximately $44,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $3,460,000 and $4,269,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	—	$	1,084	$	1,033	$	1

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	51

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the three-year period ended December 31, 2018, remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Paid-in- Capital (000)
$	58	$	—	$	54	$	4

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.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2018.

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	40	$	—

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $298,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund 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, 2018, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $71,000.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 39.7%.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the one-year period and for the period since the end of May 2016, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

19

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

20

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

22

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGCPSAN
2663867 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Endurance Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	6
Statements of Changes in Net Assets	7
Financial Highlights	8
Notes to Financial Statements	12
Privacy Notice	18
Director and Officer Information	20

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Endurance Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Endurance Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Endurance Portfolio Class I	$	1,000.00	$	1,222.00	$	1,019.84	$	5.51	$	5.01		1.00	%
Global Endurance Portfolio Class A		1,000.00		1,220.00		1,018.10		7.43		6.76		1.35
Global Endurance Portfolio Class C		1,000.00		1,215.00		1,014.38		11.53		10.49		2.10
Global Endurance Portfolio Class IS		1,000.00		1,222.00		1,020.08		5.23		4.76		0.95

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Endurance Portfolio

	Shares		Value (000)
Common Stocks (101.2%)
Australia (1.1%)
Bellamy's Australia Ltd. (a)		4,719	$	28
Canada (11.4%)
Colliers International Group, Inc.		1,790		128
Constellation Software, Inc.		181		171
				299
Germany (6.4%)
CompuGroup Medical SE		1,053		85
GRENKE AG		393		42
Nemetschek SE		669		40
				167
New Zealand (4.2%)
Ryman Healthcare Ltd.		13,894		110
South Africa (1.5%)
Discovery Ltd.		3,718		39
Sweden (4.1%)
AddLife AB, Class B		1,790		56
Cellavision AB		1,492		51
				107
United Kingdom (13.4%)
ASA International Group PLC		9,185		41
Blue Prism Group plc (a)		3,162		55
Halma PLC		1,396		36
Melrose Industries PLC		28,162		65
Metro Bank PLC (a)		5,032		34
Victoria PLC (a)		19,329		119
				350
United States (59.1%)
Appfolio, Inc., Class A (a)		414		42
Appian Corp. (a)		2,502		90
Carvana Co. (a)		2,994		188
Cimpress N.V. (a)		331		30
Copart, Inc. (a)		967		72
Fastly, Inc., Class A (a)		1,966		40
Goosehead Insurance, Inc., Class A		1,380		66
GTT Communications, Inc. (a)		6,066		107
HEICO Corp.		907		121
Installed Building Products, Inc. (a)		889		53
Invitae Corp. (a)		1,749		41
LiveRamp Holdings, Inc. (a)		1,269		62
Netflix, Inc. (a)		112		41
Rollins, Inc.		881		32
SS&C Technologies Holdings, Inc.		579		33
Stitch Fix, Inc., Class A (a)		3,625		116
Ubiquiti Networks, Inc.		519		68
UnitedHealth Group, Inc.		480		117
Wayfair, Inc., Class A (a)		582		85
XPO Logistics, Inc. (a)		2,419		140
				1,544
Total Common Stocks (Cost $2,286)				2,644

	Shares		Value (000)
Short-Term Investment (0.1%)
Investment Company (0.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $2)		1,788	$	2
Total Investments (101.3%) (Cost $2,288) (b)(c)				2,646
Liabilities in Excess of Other Assets (–1.3%)				(33	)
Net Assets (100.0%)			$	2,613

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  The approximate fair value and percentage of net assets, $801,000 and 30.7%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $487,000 and the aggregate gross unrealized depreciation is approximately $129,000, resulting in net unrealized appreciation of approximately $358,000.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		35.7	%
Software		16.3
Health Care Providers & Services		8.6
Information Technology Services		7.9
Internet & Direct Marketing Retail		7.6
Specialty Retail		7.1
Household Durables		6.5
Air Freight & Logistics		5.3
Commercial Services & Supplies		5.0
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.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Endurance Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $2,286)	$	2,644
Investment in Security of Affiliated Issuer, at Value (Cost $2)		2
Total Investments in Securities, at Value (Cost $2,288)		2,646
Foreign Currency, at Value (Cost $5)		5
Prepaid Offering Costs		88
Due from Adviser		77
Dividends Receivable		—	@
Tax Reclaim Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		11
Total Assets		2,827
Liabilities:
Payable for Offering Costs		167
Payable for Professional Fees		35
Payable for Custodian Fees		4
Payable for Investments Purchased		3
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		—	@
Other Liabilities		5
Total Liabilities		214
Net Assets	$	2,613
Net Assets Consist of:
Paid-in-Capital	$	2,148
Total Distributable Earnings		465
Net Assets	$	2,613
CLASS I:
Net Assets	$	2,577
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		210,892
Net Asset Value, Offering and Redemption Price Per Share	$	12.22
CLASS A:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Redemption Price Per Share	$	12.20
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.68
Maximum Offering Price Per Share	$	12.88
CLASS C:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	12.15
CLASS IS:
Net Assets	$	12
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	12.22

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Endurance Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1 of Foreign Taxes Withheld)	$	10
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		10
Expenses:
Offering Costs		87
Professional Fees		52
Advisory Fees (Note B)		10
Shareholder Reporting Fees		8
Custodian Fees (Note F)		5
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Registration Fees		3
Pricing Fees		2
Administration Fees (Note C)		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Directors' Fees and Expenses		—	@
Other Expenses		3
Total Expenses		175
Expenses Reimbursed by Adviser (Note B)		(150	)
Waiver of Advisory Fees (Note B)		(10	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		12
Net Investment Loss		(2	)
Realized Gain (Loss):
Investments Sold		109
Foreign Currency Translation		(—	@)
Net Realized Gain		109
Change in Unrealized Appreciation (Depreciation):
Investments		361
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		361
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		470
Net Increase in Net Assets Resulting from Operations	$	468

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Endurance Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Period Ended December 31, 2018^ (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(2	)	$	—
Net Realized Gain (Loss)		109			(—	@)
Net Change in Unrealized Appreciation (Depreciation)		361			(3	)
Net Increase (Decrease) in Net Assets Resulting from Operations		468			(3	)
Capital Share Transactions:(1)
Class I:
Subscribed		98			2,020
Class A:
Subscribed		—			10
Class C:
Subscribed		—			10
Class IS:
Subscribed		—			10
Net Increase in Net Assets Resulting from Capital Share Transactions		98			2,050
Total Increase in Net Assets		566			2,047
Net Assets:
Beginning of Period		2,047			—
End of Period	$	2,613		$	2,047
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		9			202
Class A:
Shares Subscribed		—			1
Class C:
Shares Subscribed		—			1
Class IS:
Shares Subscribed		—			1

^  Commencement of Operations.

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Endurance Portfolio

	Class I
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period Ended December 31, 2018(1)
Net Asset Value, Beginning of Period	$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		2.25			(0.02	)
Total from Investment Operations		2.24			(0.02	)
Net Asset Value, End of Period	$	12.22		$	9.98
Total Return(4)		22.20	%(7)		0.00	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,577		$	2,017
Ratio of Expenses Before Expense Limitation		14.20	%(8)		913.94	%(8)
Ratio of Expenses After Expense Limitation		1.00	%(5)(8)		1.00	%(8)
Ratio of Net Investment Loss		(0.14	)%(5)(8)		(1.00	)%(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		N/A
Portfolio Turnover Rate		46	%(7)		0	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Endurance Portfolio

	Class A
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period Ended December 31, 2018(1)
Net Asset Value, Beginning of Period	$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.03	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		2.25			(0.02	)
Total from Investment Operations		2.22			(0.02	)
Net Asset Value, End of Period	$	12.20		$	9.98
Total Return(4)		22.00	%(7)		0.00	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12		$	10
Ratio of Expenses Before Expense Limitation		28.01	%(8)		927.90	%(8)
Ratio of Expenses After Expense Limitation		1.35	%(5)(8)		1.35	%(8)
Ratio of Net Investment Loss		(0.50	)%(5)(8)		(1.35	)%(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		N/A
Portfolio Turnover Rate		46	%(7)		0	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Endurance Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period Ended December 31, 2018(1)
Net Asset Value, Beginning of Period	$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.07	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		2.24			(0.02	)
Total from Investment Operations		2.17			(0.02	)
Net Asset Value, End of Period	$	12.15		$	9.98
Total Return(4)		21.50	%(7)		0.00	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12		$	10
Ratio of Expenses Before Expense Limitation		28.79	%(8)		928.63	%(8)
Ratio of Expenses After Expense Limitation		2.10	%(5)(8)		2.10	%(8)
Ratio of Net Investment Loss		(1.24	)%(5)(8)		(2.10	)%(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		N/A
Portfolio Turnover Rate		46	%(7)		0	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Endurance Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period Ended December 31, 2018(1)
Net Asset Value, Beginning of Period	$	9.98		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		2.25			(0.02	)
Total from Investment Operations		2.24			(0.02	)
Net Asset Value, End of Period	$	12.22		$	9.98
Total Return(4)		22.20	%(7)		0.00	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	12		$	10
Ratio of Expenses Before Expense Limitation		27.75	%(8)		927.65	%(8)
Ratio of Expenses After Expense Limitation		0.95	%(5)(8)		0.95	%(8)
Ratio of Net Investment Loss		(0.09	)%(5)(8)		(0.95	)%(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		N/A
Portfolio Turnover Rate		46	%(7)		0	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Endurance Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices

if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (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

12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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 Fund's investments as of June 30, 2019:

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	$	121	$	—	$	—	$	121
Air Freight & Logistics		140		—		—		140
Banks		—		34		—		34
Biotechnology		41		—		—		41
Commercial Services & Supplies		134		—		—		134
Communications Equipment		68		—		—		68
Consumer Finance		—		41		—		41
Diversified Financial Services		—		42		—		42

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (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)
Electrical Equipment	$	—	$	65	$	—	$	65
Electronic Equipment, Instruments & Components		—		36		—		36
Entertainment		41		—		—		41
Food Products		—		28		—		28
Health Care Equipment & Supplies		—		51		—		51
Health Care Providers & Services		117		110		—		227
Health Care Technology		—		85		—		85
Household Durables		53		119		—		172
Information Technology Services		209		—		—		209
Insurance		66		39		—		105
Internet & Direct Marketing Retail		201		—		—		201
Life Sciences Tools & Services		—		56		—		56
Real Estate Management & Development		128		—		—		128
Software		336		95		—		431
Specialty Retail		188		—		—		188
Total Common Stocks		1,843		801		—		2,644
Short-Term Investment
Investment Company		2		—		—		2
Total Assets	$	1,845	$	801	$	—	$	2,646

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of

securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

5.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes,

interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $10,000 of advisory fees were waived and approximately $153,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $1,430,000 and $1,093,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	—	$	2,555	$	2,553	$	—	@

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	2

@ Amount is less than $500.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. The tax year ended December 31, 2018 remains subject to examination by taxing authorities.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. There were no distributions paid during fiscal year 2018.

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 a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)			Paid-in- Capital (000)
$	—	@	$	(—	@)

@ Amount is less than $500.

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 46.8%.

17

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

18

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

20

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGENDSAN
2663880 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Franchise Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	10
Notes to Financial Statements	15
Investment Advisory Agreement Approval	21
Privacy Notice	23
Director and Officer Information	25

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Franchise Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Franchise Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Franchise Portfolio Class I	$	1,000.00	$	1,211.00	$	1,020.28	$	4.99	$	4.56		0.91	%
Global Franchise Portfolio Class A		1,000.00		1,208.60		1,018.99		6.41		5.86		1.17
Global Franchise Portfolio Class L		1,000.00		1,206.10		1,016.46		9.19		8.40		1.68
Global Franchise Portfolio Class C		1,000.00		1,204.70		1,015.22		10.55		9.64		1.93
Global Franchise Portfolio Class IS		1,000.00		1,211.00		1,020.58		4.66		4.26		0.85

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Franchise Portfolio

	Shares		Value (000)
Common Stocks (97.9%)
France (6.3%)
L'Oreal SA		188,838	$	53,790
Pernod Ricard SA		303,153		55,864
				109,654
Germany (6.1%)
SAP SE		773,041		106,263
Italy (1.1%)
Davide Campari-Milano SpA		1,936,127		18,956
Netherlands (3.7%)
Heineken N.V.		581,394		64,895
United Kingdom (21.6%)
British American Tobacco PLC		1,336,750		46,658
Experian PLC		1,418,553		43,064
Reckitt Benckiser Group PLC		1,703,104		134,592
RELX PLC		1,826,940		44,402
RELX PLC		706,527		17,098
Unilever PLC		1,455,580		90,388
				376,202
United States (59.1%)
Abbott Laboratories		681,152		57,285
Accenture PLC, Class A		447,032		82,598
Automatic Data Processing, Inc.		360,822		59,655
Baxter International, Inc.		881,647		72,207
Becton Dickinson & Co.		217,413		54,790
Church & Dwight Co., Inc.		302,254		22,083
Clorox Co. (The)		90,305		13,827
Coca-Cola Co. (The)		1,172,764		59,717
Danaher Corp.		457,012		65,316
Factset Research Systems, Inc.		84,300		24,157
Fidelity National Information Services, Inc.		303,490		37,232
Fox Corp., Class A (a)		391,862		14,358
Fox Corp., Class B (a)		326,318		11,920
Microsoft Corp.		1,012,385		135,619
Moody's Corp.		116,721		22,797
NIKE, Inc., Class B		382,109		32,078
Philip Morris International, Inc.		1,489,241		116,950
Visa, Inc., Class A		532,254		92,373
Zoetis, Inc.		486,548		55,218
				1,030,180
Total Common Stocks (Cost $1,297,696)				1,706,150
Short-Term Investment (2.6%)
Investment Company (2.6%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $44,633)		44,633,395		44,633
Total Investments (100.5%) (Cost $1,342,329) (b)(c)				1,750,783
Liabilities in Excess of Other Assets (–0.5%)				(7,939	)
Net Assets (100.0%)			$	1,742,844

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  The approximate fair value and percentage of net assets, $675,970,000 and 38.8%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $437,179,000 and the aggregate gross unrealized depreciation is approximately $28,725,000, resulting in net unrealized appreciation of approximately $408,454,000.

Portfolio Composition

Classification	Percentage of Total Investments
Information Technology Services		15.5	%
Health Care Equipment & Supplies		14.3
Software		13.8
Other*		11.7
Beverages		11.4
Household Products		9.7
Tobacco		9.4
Personal Products		8.2
Professional Services		6.0
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.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Franchise Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $1,297,696)	$	1,706,150
Investment in Security of Affiliated Issuer, at Value (Cost $44,633)		44,633
Total Investments in Securities, at Value (Cost $1,342,329)		1,750,783
Dividends Receivable		3,943
Receivable for Fund Shares Sold		1,722
Tax Reclaim Receivable		580
Receivable from Affiliate		63
Other Assets		149
Total Assets		1,757,240
Liabilities:
Payable for Investments Purchased		10,101
Payable for Advisory Fees		3,171
Payable for Fund Shares Redeemed		679
Payable for Shareholder Services Fees — Class A		48
Payable for Distribution and Shareholder Services Fees — Class L		5
Payable for Distribution and Shareholder Services Fees — Class C		63
Payable for Administration Fees		115
Payable for Sub Transfer Agency Fees — Class I		69
Payable for Sub Transfer Agency Fees — Class A		14
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class C		2
Payable for Professional Fees		49
Payable for Transfer Agency Fees — Class I		6
Payable for Transfer Agency Fees — Class A		1
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Custodian Fees		8
Other Liabilities		63
Total Liabilities		14,396
Net Assets	$	1,742,844
Net Assets Consist of:
Paid-in-Capital	$	1,277,477
Total Distributable Earnings		465,367
Net Assets	$	1,742,844

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Franchise Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	1,312,070
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		47,051,132
Net Asset Value, Offering and Redemption Price Per Share	$	27.89
CLASS A:
Net Assets	$	239,575
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		8,796,732
Net Asset Value, Redemption Price Per Share	$	27.23
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.51
Maximum Offering Price Per Share	$	28.74
CLASS L:
Net Assets	$	8,062
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		296,936
Net Asset Value, Offering and Redemption Price Per Share	$	27.15
CLASS C:
Net Assets	$	80,504
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,020,126
Net Asset Value, Offering and Redemption Price Per Share	$	26.66
CLASS IS:
Net Assets	$	102,633
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,680,764
Net Asset Value, Offering and Redemption Price Per Share	$	27.88

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Franchise Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $450 of Foreign Taxes Withheld)	$	17,991
Dividends from Security of Affiliated Issuer (Note G)		460
Total Investment Income		18,451
Expenses:
Advisory Fees (Note B)		5,929
Administration Fees (Note C)		635
Shareholder Services Fees — Class A (Note D)		246
Distribution and Shareholder Services Fees — Class L (Note D)		28
Distribution and Shareholder Services Fees — Class C (Note D)		329
Sub Transfer Agency Fees — Class I		311
Sub Transfer Agency Fees — Class A		65
Sub Transfer Agency Fees — Class L		2
Sub Transfer Agency Fees — Class C		24
Professional Fees		59
Registration Fees		49
Custodian Fees (Note F)		31
Shareholder Reporting Fees		27
Directors' Fees and Expenses		19
Transfer Agency Fees — Class I (Note E)		8
Transfer Agency Fees — Class A (Note E)		2
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		2
Transfer Agency Fees — Class IS (Note E)		1
Pricing Fees		1
Other Expenses		24
Total Expenses		7,793
Rebate from Morgan Stanley Affiliate (Note G)		(41	)
Net Expenses		7,752
Net Investment Income		10,699
Realized Gain (Loss):
Investments Sold		47,617
Foreign Currency Translation		(148	)
Net Realized Gain		47,469
Change in Unrealized Appreciation (Depreciation):
Investments		239,728
Foreign Currency Translation		7
Net Change in Unrealized Appreciation (Depreciation)		239,735
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		287,204
Net Increase in Net Assets Resulting from Operations	$	297,903

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Franchise Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	10,699		$	13,172
Net Realized Gain		47,469			53,237
Net Change in Unrealized Appreciation (Depreciation)		239,735			(97,028	)
Net Increase (Decrease) in Net Assets Resulting from Operations		297,903			(30,619	)
Dividends and Distributions to Shareholders:
Class I		—			(46,526	)
Class A		—			(7,892	)
Class L		—			(359	)
Class C		—			(2,499	)
Class IS		—			(11,432	)
Total Dividends and Distributions to Shareholders		—			(68,708	)
Capital Share Transactions:(1)
Class I:
Subscribed		311,711			408,679
Distributions Reinvested		—			45,332
Redeemed		(125,020	)		(223,714	)
Class A:
Subscribed		74,269			40,032
Distributions Reinvested		—			7,833
Redeemed		(21,574	)		(32,392	)
Class L:
Exchanged		144			199
Distributions Reinvested		—			358
Redeemed		(761	)		(728	)
Class C:
Subscribed		18,562			19,817
Distributions Reinvested		—			2,481
Redeemed		(5,300	)		(10,618	)
Class IS:
Subscribed		7			125,041
Distributions Reinvested		—			11,432
Redeemed		(143,056	)		(4,502	)
Net Increase in Net Assets Resulting from Capital Share Transactions		108,982			389,250
Total Increase in Net Assets		406,885			289,923
Net Assets:
Beginning of Period		1,335,959			1,046,036
End of Period	$	1,742,844		$	1,335,959

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Franchise Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)    Capital Share Transactions:
Class I:
Shares Subscribed		12,104			16,522
Shares Issued on Distributions Reinvested		—			1,916
Shares Redeemed		(4,924	)		(9,029	)
Net Increase in Class I Shares Outstanding		7,180			9,409
Class A:
Shares Subscribed		2,961			1,634
Shares Issued on Distributions Reinvested		—			338
Shares Redeemed		(865	)		(1,333	)
Net Increase in Class A Shares Outstanding		2,096			639
Class L:
Shares Exchanged		6			9
Shares Issued on Distributions Reinvested		—			15
Shares Redeemed		(34	)		(30	)
Net Decrease in Class L Shares Outstanding		(28	)		(6	)
Class C:
Shares Subscribed		737			830
Shares Issued on Distributions Reinvested		—			109
Shares Redeemed		(214	)		(445	)
Net Increase in Class C Shares Outstanding		523			494
Class IS:
Shares Subscribed		—	@@		4,898
Shares Issued on Distributions Reinvested		—			483
Shares Redeemed		(5,178	)		(183	)
Net Increase (Decrease) in Class IS Shares Outstanding		(5,178	)		5,198

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Franchise Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	23.03		$	24.72		$	20.56		$	20.33		$	20.27		$	20.77
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.18			0.29			0.27			0.30			0.31			0.41
Net Realized and Unrealized Gain (Loss)		4.68			(0.63	)		5.05			0.84			1.02			0.57
Total from Investment Operations		4.86			(0.34	)		5.32			1.14			1.33			0.98
Distributions from and/or in Excess of:
Net Investment Income		—			(0.27	)		(0.24	)		(0.28	)		(0.35	)		(0.37	)
Net Realized Gain		—			(1.08	)		(0.92	)		(0.63	)		(0.92	)		(1.11	)
Total Distributions		—			(1.35	)		(1.16	)		(0.91	)		(1.27	)		(1.48	)
Net Asset Value, End of Period	$	27.89		$	23.03		$	24.72		$	20.56		$	20.33		$	20.27
Total Return(3)		21.10	%(6)		(1.50	)%		25.85	%		5.64	%		6.50	%		4.82	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,312,042		$	918,409		$	753,107		$	601,340		$	505,321		$	515,012
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			0.98	%		0.99	%		N/A
Ratio of Expenses After Expense Limitation		0.91	%(4)(7)		0.94	%(4)		0.98	%(4)		0.97	%(4)		0.98	%(4)		0.97	%(4)
Ratio of Net Investment Income		1.43	%(4)(7)		1.14	%(4)		1.17	%(4)		1.40	%(4)		1.46	%(4)		1.94	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)
Portfolio Turnover Rate		11	%(6)		27	%		28	%		30	%		37	%		33	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Franchise Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	22.53		$	24.21		$	20.16		$	19.96		$	19.92		$	20.44
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.15			0.21			0.22			0.23			0.24			0.34
Net Realized and Unrealized Gain (Loss)		4.55			(0.61	)		4.94			0.83			1.02			0.55
Total from Investment Operations		4.70			(0.40	)		5.16			1.06			1.26			0.89
Distributions from and/or in Excess of:
Net Investment Income		—			(0.20	)		(0.19	)		(0.23	)		(0.30	)		(0.30	)
Net Realized Gain		—			(1.08	)		(0.92	)		(0.63	)		(0.92	)		(1.11	)
Total Distributions		—			(1.28	)		(1.11	)		(0.86	)		(1.22	)		(1.41	)
Net Asset Value, End of Period	$	27.23		$	22.53		$	24.21		$	20.16		$	19.96		$	19.92
Total Return(3)		20.86	%(6)		(1.77	)%		25.58	%		5.36	%		6.25	%		4.45	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	239,575		$	150,936		$	146,722		$	104,306		$	75,297		$	64,515
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			1.23	%		1.25	%		N/A
Ratio of Expenses After Expense Limitation		1.17	%(4)(7)		1.23	%(4)		1.21	%(4)		1.22	%(4)		1.25	%(4)		1.27	%(4)
Ratio of Net Investment Income		1.21	%(4)(7)		0.84	%(4)		0.94	%(4)		1.13	%(4)		1.15	%(4)		1.64	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)
Portfolio Turnover Rate		11	%(6)		27	%		28	%		30	%		37	%		33	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Franchise Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	22.51		$	24.18		$	20.13		$	19.91		$	19.87		$	20.39
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.08			0.09			0.10			0.13			0.15			0.25
Net Realized and Unrealized Gain (Loss)		4.56			(0.62	)		4.93			0.82			1.00			0.55
Total from Investment Operations		4.64			(0.53	)		5.03			0.95			1.15			0.80
Distributions from and/or in Excess of:
Net Investment Income		—			(0.06	)		(0.06	)		(0.10	)		(0.19	)		(0.21	)
Net Realized Gain		—			(1.08	)		(0.92	)		(0.63	)		(0.92	)		(1.11	)
Total Distributions		—			(1.14	)		(0.98	)		(0.73	)		(1.11	)		(1.32	)
Net Asset Value, End of Period	$	27.15		$	22.51		$	24.18		$	20.13		$	19.91		$	19.87
Total Return(3)		20.61	%(6)		(2.29	)%		24.98	%		4.82	%		5.72	%		4.00	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8,062		$	7,312		$	7,993		$	7,449		$	8,898		$	9,315
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			1.72	%		1.73	%		N/A
Ratio of Expenses After Expense Limitation		1.68	%(4)(7)		1.73	%(4)		1.70	%(4)		1.71	%(4)		1.72	%(4)		1.72	%(4)
Ratio of Net Investment Income		0.62	%(4)(7)		0.36	%(4)		0.44	%(4)		0.65	%(4)		0.72	%(4)		1.19	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)		0.00	%(5)
Portfolio Turnover Rate		11	%(6)		27	%		28	%		30	%		37	%		33	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Franchise Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from September 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	22.13		$	23.82		$	19.88		$	19.75		$	19.79
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.05			0.03			0.04			0.06			0.01
Net Realized and Unrealized Gain (Loss)		4.48			(0.60	)		4.86			0.84			1.02
Total from Investment Operations		4.53			(0.57	)		4.90			0.90			1.03
Distributions from and/or in Excess of:
Net Investment Income		—			(0.04	)		(0.04	)		(0.14	)		(0.28	)
Net Realized Gain		—			(1.08	)		(0.92	)		(0.63	)		(0.79	)
Total Distributions		—			(1.12	)		(0.96	)		(0.77	)		(1.07	)
Net Asset Value, End of Period	$	26.66		$	22.13		$	23.82		$	19.88		$	19.75
Total Return(4)		20.47	%(7)		(2.51	)%		24.63	%		4.58	%		5.11	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	80,504		$	55,271		$	47,726		$	29,650		$	5,765
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			2.00	%		N/A
Ratio of Expenses After Expense Limitation		1.93	%(5)(8)		1.96	%(5)		1.98	%(5)		1.99	%(5)		2.03	%(5)(8)
Ratio of Net Investment Income		0.41	%(5)(8)		0.12	%(5)		0.16	%(5)		0.29	%(5)		0.11	%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)(8)
Portfolio Turnover Rate		11	%(7)		27	%		28	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Franchise Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from December 15, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	23.03		$	24.72		$	20.55		$	20.33		$	21.49
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.17			0.32			0.29			0.21			0.12
Net Realized and Unrealized Gain (Loss)		4.68			(0.65	)		5.05			0.93			0.00	(4)
Total from Investment Operations		4.85			(0.33	)		5.34			1.14			0.12
Distributions from and/or in Excess of:
Net Investment Income		—			(0.28	)		(0.25	)		(0.29	)		(0.36	)
Net Realized Gain		—			(1.08	)		(0.92	)		(0.63	)		(0.92	)
Total Distributions		—			(1.36	)		(1.17	)		(0.92	)		(1.28	)
Net Asset Value, End of Period	$	27.88		$	23.03		$	24.72		$	20.55		$	20.33
Total Return(5)		21.10	%(8)		(1.45	)%		26.00	%		5.70	%		0.45	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	102,661		$	204,031		$	90,488		$	19,334		$	9
Ratio of Expenses Before Expense Limitation		N/A			N/A			N/A			0.94	%		16.54	%(9)
Ratio of Expenses After Expense Limitation		0.85	%(6)(9)		0.88	%(6)		0.91	%(6)		0.92	%(6)		0.94	%(6)(9)
Ratio of Net Investment Income		1.38	%(6)(9)		1.30	%(6)		1.23	%(6)		0.99	%(6)		0.95	%(6)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		11	%(8)		27	%		28	%		30	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Franchise Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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),

and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the closing price, last sale price or the mean between

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	59,717	$	139,715	$	—	$	199,432
Capital Markets		46,954		—		—		46,954
Health Care Equipment & Supplies		249,598		—		—		249,598
Household Products		35,910		134,592		—		170,502
Information Technology Services		271,858		—		—		271,858
Media		26,278		—		—		26,278
Personal Products		—		144,178		—		144,178
Pharmaceuticals		55,218		—		—		55,218
Professional Services		—		104,564		—		104,564
Software		135,619		106,263		—		241,882
Textiles, Apparel & Luxury Goods		32,078		—		—		32,078
Tobacco		116,950		46,658		—		163,608
Total Common Stocks		1,030,180		675,970		—		1,706,150
Short-Term Investment
Investment Company		44,633		—		—		44,633
Total Assets	$	1,074,813	$	675,970	$	—	$	1,750,783

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized

and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

5.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the 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, 2019, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.74% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating

expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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. This arrangement had no effect for the six months ended June 30, 2019.

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

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $372,242,000 and $175,718,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the

Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $41,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	63,220	$	380,146	$	398,733	$	460

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	44,633

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	12,935	$	55,773	$	11,212	$	35,316

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 in 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 equalization debits and a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(5,354	)	$	5,354

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	745	$	1,772

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 21.3%.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator 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 considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund'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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's contractual management fee was lower than its peer group average, the actual management fee was higher than but close to its peer group average and the total expense ratio was lower than its peer group average. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

22

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

23

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

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

Sub-Adviser

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

Distributor

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

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

25

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGFSAN
2663890 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Infrastructure Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	17
Investment Advisory Agreement Approval	24
Privacy Notice	26
Director and Officer Information	28

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Infrastructure Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Infrastructure Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		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	$	1,196.90	$	1,019.98	$	5.28	$	4.86		0.97	%
Global Infrastructure Portfolio Class A		1,000.00		1,195.80		1,018.79		6.59		6.06		1.21
Global Infrastructure Portfolio Class L		1,000.00		1,192.20		1,015.97		9.68		8.90		1.78
Global Infrastructure Portfolio Class C		1,000.00		1,190.60		1,014.53		11.24		10.34		2.07
Global Infrastructure Portfolio Class IS		1,000.00		1,196.90		1,020.13		5.12		4.71		0.94
Global Infrastructure Portfolio Class IR		1,000.00		1,197.90		1,020.13		5.12		4.71		0.94

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Infrastructure Portfolio

	Shares		Value (000)
Common Stocks (95.2%)
Australia (5.4%)
APA Group		319,035	$	2,423
Atlas Arteria Ltd.		519,886		2,867
Sydney Airport		667,278		3,770
Transurban Group		1,000,638		10,367
				19,427
Brazil (0.4%)
Energisa SA (Units) (a)		108,200		1,298
Canada (14.7%)
Enbridge, Inc.		402,975		14,555
Hydro One Ltd.		928,336		16,191
Pembina Pipeline Corp.		190,668		7,098
TC Energy Corp. (b)		290,361		14,395
				52,239
China (3.0%)
China Gas Holdings Ltd. (c)		1,705,200		6,330
China Tower Corp. Ltd. H Shares (c)		2,930,000		771
ENN Energy Holdings Ltd. (c)		358,900		3,495
				10,596
France (5.5%)
Aeroports de Paris		12,760		2,252
Getlink SE		326,200		5,227
Vinci SA		117,460		12,043
				19,522
Hong Kong (0.6%)
China Everbright International Ltd.		2,351,000		2,173
India (1.1%)
Azure Power Global Ltd. (d)		369,689		3,900
Italy (2.8%)
Atlantia SpA		152,772		3,975
Infrastrutture Wireless Italiane SpA		116,240		1,137
Italgas SpA		253,998		1,705
Snam SpA		578,840		2,880
Terna Rete Elettrica Nazionale SpA		27,950		178
				9,875
Mexico (6.9%)
Promotora y Operadora de Infraestructura SAB de CV		2,455,576		24,446
Netherlands (0.4%)
Koninklijke Vopak N.V.		33,030		1,526
New Zealand (0.5%)
Auckland International Airport Ltd.		284,601		1,886
Spain (7.1%)
Aena SME SA		15,580		3,088
Atlantica Yield PLC		735,062		16,664
Cellnex Telecom SA (d)		4,475		166
Ferrovial SA		164,773		4,218
Red Electrica Corp., SA		54,130		1,127
				25,263

	Shares		Value (000)
Switzerland (0.7%)
Flughafen Zurich AG (Registered)		12,620	$	2,374
United Kingdom (7.4%)
John Laing Group PLC		1,310,441		6,564
National Grid PLC		1,343,577		14,278
Pennon Group PLC		154,611		1,459
Severn Trent PLC		70,626		1,838
United Utilities Group PLC		231,308		2,301
				26,440
United States (38.7%)
American Electric Power Co., Inc.		6,130		539
American Tower Corp. REIT		127,030		25,970
American Water Works Co., Inc.		63,550		7,372
Aqua America, Inc.		107,719		4,456
Atmos Energy Corp.		69,496		7,336
CenterPoint Energy, Inc.		66,520		1,904
Cheniere Energy, Inc. (d)		98,450		6,739
Consolidated Edison, Inc.		87,620		7,683
Crown Castle International Corp. REIT		110,562		14,412
Edison International		112,917		7,612
Eversource Energy		101,641		7,700
Kinder Morgan, Inc.		487,920		10,188
NiSource, Inc.		131,368		3,783
ONEOK, Inc.		70,320		4,839
SBA Communications Corp. REIT (d)		2,380		535
Sempra Energy		95,436		13,117
Targa Resources Corp.		49,710		1,952
Williams Cos., Inc. (The)		399,103		11,191
Xcel Energy, Inc.		6,090		362
				137,690
Total Common Stocks (Cost $265,575)				338,655
Short-Term Investments (9.3%)
Securities held as Collateral on Loaned Securities (4.1%)
Investment Company (3.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		11,170,381		11,170
	Face Amount (000)
Repurchase Agreements (1.0%)
Barclays Capital, Inc., (2.50%, dated 6/28/19, due 7/1/19; proceeds $518; fully collateralized by a U.S. Government obligation; 3.63% due 2/15/44; valued at $528)	$	518		518

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Infrastructure Portfolio

	Face Amount (000)		Value (000)
Repurchase Agreements (cont'd)
Merrill Lynch & Co., Inc., (2.48%, dated 6/28/19, due 7/1/19; proceeds $2,897; fully collateralized by U.S. Government obligations; 2.13% - 2.50% due 2/15/41 - 5/15/46; valued at $2,955)	$	2,897	$	2,897
				3,415
Total Securities held as Collateral on Loaned Securities (Cost $14,585)				14,585
	Shares
Investment Company (5.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $18,640)		18,639,502		18,640
Total Short-Term Investments (Cost $33,225)				33,225
Total Investments (104.5%) (Cost $298,800) Including $14,119 of Securities Loaned (e)(f)				371,880
Liabilities in Excess of Other Assets (–4.5%)				(15,956	)
Net Assets (100.0%)			$	355,924

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

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

(b)  All or a portion of this security was on loan at June 30, 2019.

(c)  Security trades on the Hong Kong exchange.

(d)  Non-income producing security.

(e)  The approximate fair value and percentage of net assets, $102,418,000 and 28.8%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $75,859,000 and the aggregate gross unrealized depreciation is approximately $2,779,000, resulting in net unrealized appreciation of approximately $73,080,000.

REIT  Real Estate Investment Trust.

Portfolio Composition*

Classification	Percentage of Total Investments
Oil & Gas Storage & Transportation		31.8	%
Electricity Transmission & Distribution		16.0
Toll Roads		13.1
Communications		12.0
Diversified		6.9
Renewables		5.8
Water		5.5
Short-Term Investments		5.2
Other**		3.7
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding securities held as Collateral on Loaned Securities) as of June 30, 2019.

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

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Infrastructure Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $268,990)	$	342,070
Investment in Security of Affiliated Issuer, at Value (Cost $29,810)		29,810
Total Investments in Securities, at Value (Cost $298,800)		371,880
Foreign Currency, at Value (Cost $354)		354
Cash from Securities Lending		84
Dividends Receivable		1,237
Receivable for Investments Sold		716
Receivable for Fund Shares Sold		114
Tax Reclaim Receivable		80
Receivable from Affiliate		32
Receivable from Securities Lending Income		6
Other Assets		103
Total Assets		374,606
Liabilities:
Collateral on Securities Loaned, at Value		14,669
Payable for Investments Purchased		2,930
Payable for Advisory Fees		608
Payable for Fund Shares Redeemed		198
Payable for Professional Fees		55
Payable for Shareholder Services Fees — Class A		49
Payable for Distribution and Shareholder Services Fees — Class L		2
Payable for Distribution and Shareholder Services Fees — Class C		2
Payable for Sub Transfer Agency Fees — Class I		20
Payable for Sub Transfer Agency Fees — Class A		27
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class C		1
Payable for Directors' Fees and Expenses		44
Payable for Administration Fees		23
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		15
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Custodian Fees		10
Other Liabilities		26
Total Liabilities		18,682
Net Assets	$	355,924
Net Assets Consist of:
Paid-in-Capital	$	289,908
Total Distributable Earnings		66,016
Net Assets	$	355,924

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Infrastructure Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	83,722
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,643,956
Net Asset Value, Offering and Redemption Price Per Share	$	14.83
CLASS A:
Net Assets	$	238,103
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		16,107,977
Net Asset Value, Redemption Price Per Share	$	14.78
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.82
Maximum Offering Price Per Share	$	15.60
CLASS L:
Net Assets	$	3,731
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		253,858
Net Asset Value, Offering and Redemption Price Per Share	$	14.70
CLASS C:
Net Assets	$	2,692
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		185,707
Net Asset Value, Offering and Redemption Price Per Share	$	14.49
CLASS IS:
Net Assets	$	27,665
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,865,314
Net Asset Value, Offering and Redemption Price Per Share	$	14.83
CLASS IR:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		709
Net Asset Value, Offering and Redemption Price Per Share	$	14.83
(1) Including: Securities on Loan, at Value:	$	14,119

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Infrastructure Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $387 of Foreign Taxes Withheld)	$	6,854
Dividends from Security of Affiliated Issuer (Note G)		93
Income from Securities Loaned — Net		34
Total Investment Income		6,981
Expenses:
Advisory Fees (Note B)		1,433
Shareholder Services Fees — Class A (Note D)		285
Distribution and Shareholder Services Fees — Class L (Note D)		14
Distribution and Shareholder Services Fees — Class C (Note D)		13
Administration Fees (Note C)		135
Sub Transfer Agency Fees — Class I		43
Sub Transfer Agency Fees — Class A		77
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		1
Professional Fees		56
Registration Fees		34
Custodian Fees (Note F)		32
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		23
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Transfer Agency Fees — Class IR (Note E)		1
Shareholder Reporting Fees		23
Directors' Fees and Expenses		7
Pricing Fees		2
Other Expenses		8
Expenses Before Non Operating Expenses		2,193
Bank Overdraft Expense		1
Total Expenses		2,194
Waiver of Advisory Fees (Note B)		(146	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(34	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(77	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(7	)
Net Expenses		1,927
Net Investment Income		5,054
Realized Loss:
Investments Sold		(3,072	)
Foreign Currency Translation		(4	)
Net Realized Loss		(3,076	)
Change in Unrealized Appreciation (Depreciation):
Investments		57,906
Foreign Currency Translation		8
Net Change in Unrealized Appreciation (Depreciation)		57,914
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		54,838
Net Increase in Net Assets Resulting from Operations	$	59,892

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Infrastructure Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	5,054		$	7,315
Net Realized Gain (Loss)		(3,076	)		12,249
Net Change in Unrealized Appreciation (Depreciation)		57,914			(49,202	)
Net Increase (Decrease) in Net Assets Resulting from Operations		59,892			(29,638	)
Dividends and Distributions to Shareholders:
Class I		—			(5,882	)
Class A		—			(17,909	)
Class L		—			(302	)
Class C		—			(197	)
Class IS		—			(2,024	)
Class IR		—			(1	)
Total Dividends and Distributions to Shareholders		—			(26,315	)
Capital Share Transactions:(1)
Class I:
Subscribed		12,378			19,564
Distributions Reinvested		—			5,871
Redeemed		(7,293	)		(42,709	)
Class A:
Subscribed		1,078			5,187
Distributions Reinvested		—			17,545
Redeemed		(16,516	)		(49,956	)
Class L:
Exchanged		2			11
Distributions Reinvested		—			295
Redeemed		(746	)		(1,420	)
Class C:
Subscribed		5			692
Distributions Reinvested		—			197
Redeemed		(363	)		(1,417	)
Class IS:
Subscribed		2,808			19,545
Distributions Reinvested		—			2,023
Redeemed		(4,407	)		(3,149	)
Class IR:
Subscribed		—			10	(a)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(13,054	)		(27,711	)
Total Increase (Decrease) in Net Assets		46,838			(83,664	)
Net Assets:
Beginning of Period		309,086			392,750
End of Period	$	355,924		$	309,086

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Infrastructure Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		904			1,382
Shares Issued on Distributions Reinvested		—			453
Shares Redeemed		(532	)		(3,068	)
Net Increase (Decrease) in Class I Shares Outstanding		372			(1,233	)
Class A:
Shares Subscribed		79			382
Shares Issued on Distributions Reinvested		—			1,357
Shares Redeemed		(1,198	)		(3,604	)
Net Decrease in Class A Shares Outstanding		(1,119	)		(1,865	)
Class L:
Shares Exchanged		—	@@		1
Shares Issued on Distributions Reinvested		—			23
Shares Redeemed		(55	)		(103	)
Net Decrease in Class L Shares Outstanding		(55	)		(79	)
Class C:
Shares Subscribed		—	@@		49
Shares Issued on Distributions Reinvested		—			15
Shares Redeemed		(26	)		(103	)
Net Decrease in Class C Shares Outstanding		(26	)		(39	)
Class IS:
Shares Subscribed		201			1,391
Shares Issued on Distributions Reinvested		—			157
Shares Redeemed		(311	)		(223	)
Net Increase (Decrease) in Class IS Shares Outstanding		(110	)		1,325
Class IR:
Shares Subscribed		—			1	(a)

(a)  For the period June 15, 2018 through December 31, 2018.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Infrastructure Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	12.39		$	14.64		$	14.02		$	12.59		$	15.41		$	14.26
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.22			0.31			0.44			0.40			0.40			0.28
Net Realized and Unrealized Gain (Loss)		2.22			(1.45	)		1.33			1.55			(2.54	)		1.87
Total from Investment Operations		2.44			(1.14	)		1.77			1.95			(2.14	)		2.15
Distributions from and/or in Excess of:
Net Investment Income		—			(0.37	)		(0.42	)		(0.37	)		(0.35	)		(0.22	)
Net Realized Gain		—			(0.74	)		(0.73	)		(0.15	)		(0.32	)		(0.78	)
Paid-in-Capital		—			—			—			—			(0.01	)		—
Total Distributions		—			(1.11	)		(1.15	)		(0.52	)		(0.68	)		(1.00	)
Net Asset Value, End of Period	$	14.83		$	12.39		$	14.64		$	14.02		$	12.59		$	15.41
Total Return(3)		19.69	%(8)		(8.02	)%		12.70	%		15.55	%		(13.90	)%		15.38	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	83,722		$	65,311		$	95,219		$	58,794		$	47,878		$	40,477
Ratio of Expenses Before Expense Limitation		1.15	%(9)		1.16	%		1.08	%		1.04	%		1.10	%		1.42	%
Ratio of Expenses After Expense Limitation		0.97	%(4)(9)		0.97	%(4)		0.91	%(4)(5)		0.85	%(4)		0.88	%(4)(6)		1.08	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.97	%(4)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income		3.20	%(4)(9)		2.21	%(4)		2.93	%(4)		2.85	%(4)		2.70	%(4)		1.82	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		14	%(8)		43	%		45	%		48	%		48	%		40	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.97% for Class I shares. Prior to July 1, 2017, the maximum ratio was 0.87% for Class I shares.

(6)  Effective March 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.87% for Class I shares. Prior to March 30, 2015, the maximum ratio was 1.15% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Infrastructure Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	12.36		$	14.60		$	13.99		$	12.56		$	15.38		$	14.25
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.20			0.28			0.39			0.36			0.39			0.24
Net Realized and Unrealized Gain (Loss)		2.22			(1.45	)		1.33			1.55			(2.56	)		1.86
Total from Investment Operations		2.42			(1.17	)		1.72			1.91			(2.17	)		2.10
Distributions from and/or in Excess of:
Net Investment Income		—			(0.33	)		(0.38	)		(0.33	)		(0.32	)		(0.19	)
Net Realized Gain		—			(0.74	)		(0.73	)		(0.15	)		(0.32	)		(0.78	)
Paid-in-Capital		—			—			—			—			(0.01	)		—
Total Distributions		—			(1.07	)		(1.11	)		(0.48	)		(0.65	)		(0.97	)
Net Asset Value, End of Period	$	14.78		$	12.36		$	14.60		$	13.99		$	12.56		$	15.38
Total Return(3)		19.58	%(8)		(8.22	)%		12.37	%		15.29	%		(14.08	)%		14.94	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	238,103		$	212,919		$	278,780		$	275,481		$	263,702		$	20,815
Ratio of Expenses Before Expense Limitation		1.36	%(9)		1.37	%		1.38	%		1.37	%		1.35	%		1.76	%
Ratio of Expenses After Expense Limitation		1.21	%(4)(9)		1.21	%(4)		1.15	%(4)(5)		1.10	%(4)		1.12	%(4)(6)		1.42	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.21	%(4)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income		2.93	%(4)(9)		2.00	%(4)		2.63	%(4)		2.60	%(4)		2.67	%(4)		1.53	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		14	%(8)		43	%		45	%		48	%		48	%		40	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.21% for Class A shares. Prior to July 1, 2017, the maximum ratio was 1.11% for Class A shares.

(6)  Effective March 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.11% for Class A shares. Prior to March 30, 2015, the maximum ratio was 1.50% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Infrastructure Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	12.33		$	14.55		$	13.94		$	12.52		$	15.34		$	14.22
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.16			0.20			0.31			0.28			0.30			0.14
Net Realized and Unrealized Gain (Loss)		2.21			(1.44	)		1.33			1.54			(2.55	)		1.87
Total from Investment Operations		2.37			(1.24	)		1.64			1.82			(2.25	)		2.01
Distributions from and/or in Excess of:
Net Investment Income		—			(0.24	)		(0.30	)		(0.25	)		(0.24	)		(0.11	)
Net Realized Gain		—			(0.74	)		(0.73	)		(0.15	)		(0.32	)		(0.78	)
Paid-in-Capital		—			—			—			—			(0.01	)		—
Total Distributions		—			(0.98	)		(1.03	)		(0.40	)		(0.57	)		(0.89	)
Net Asset Value, End of Period	$	14.70		$	12.33		$	14.55		$	13.94		$	12.52		$	15.34
Total Return(3)		19.22	%(8)		(8.73	)%		11.80	%		14.57	%		(14.64	)%		14.35	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	3,731		$	3,805		$	5,634		$	5,534		$	5,529		$	1,115
Ratio of Expenses Before Expense Limitation		1.91	%(9)		1.87	%		1.95	%		1.95	%		1.95	%		2.41	%
Ratio of Expenses After Expense Limitation		1.78	%(4)(9)		1.78	%(4)		1.72	%(4)(5)		1.67	%(4)		1.69	%(4)(6)		2.00	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.78	%(4)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income		2.31	%(4)(9)		1.41	%(4)		2.06	%(4)		2.03	%(4)		2.06	%(4)		0.91	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		14	%(8)		43	%		45	%		48	%		48	%		40	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.78% for Class L shares. Prior to July 1, 2017, the maximum ratio was 1.68% for Class L shares.

(6)  Effective March 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.68% for Class L shares. Prior to March 30, 2015, the maximum ratio was 2.00% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Infrastructure Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	12.17		$	14.36		$	13.81		$	12.47		$	15.87
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.14			0.16			0.29			0.26			0.17
Net Realized and Unrealized Gain (Loss)		2.18			(1.42	)		1.28			1.52			(2.97	)
Total from Investment Operations		2.32			(1.26	)		1.57			1.78			(2.80	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.19	)		(0.29	)		(0.29	)		(0.27	)
Net Realized Gain		—			(0.74	)		(0.73	)		(0.15	)		(0.32	)
Paid-in-Capital		—			—			—			—			(0.01	)
Total Distributions		—			(0.93	)		(1.02	)		(0.44	)		(0.60	)
Net Asset Value, End of Period	$	14.49		$	12.17		$	14.36		$	13.81		$	12.47
Total Return(4)		19.06	%(8)		(9.02	)%		11.42	%		14.35	%		(17.62	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,692		$	2,580		$	3,601		$	784		$	516
Ratio of Expenses Before Expense Limitation		2.19	%(9)		2.20	%		2.23	%		2.69	%		2.34	%(9)
Ratio of Expenses After Expense Limitation		2.07	%(5)(9)		2.07	%(5)		2.02	%(5)(6)		1.96	%(5)		1.97	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		2.07	%(5)(9)		N/A			N/A			N/A			N/A
Ratio of Net Investment Income		2.05	%(5)(9)		1.14	%(5)		1.96	%(5)		1.90	%(5)		1.81	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.01	%		0.01	%		0.00	%(7)(9)
Portfolio Turnover Rate		14	%(8)		43	%		45	%		48	%		48	%(8)

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.07% for Class C shares. Prior to July 1, 2017, the maximum ratio was 1.97% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Infrastructure Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	12.38		$	14.63		$	14.02		$	12.58		$	15.41		$	14.26
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.22			0.32			0.45			0.43			0.53			0.28
Net Realized and Unrealized Gain (Loss)		2.23			(1.46	)		1.32			1.53			(2.68	)		1.87
Total from Investment Operations		2.45			(1.14	)		1.77			1.96			(2.15	)		2.15
Distributions from and/or in Excess of:
Net Investment Income		—			(0.37	)		(0.43	)		(0.37	)		(0.35	)		(0.22	)
Net Realized Gain		—			(0.74	)		(0.73	)		(0.15	)		(0.32	)		(0.78	)
Paid-in-Capital		—			—			—			—			(0.01	)		—
Total Distributions		—			(1.11	)		(1.16	)		(0.52	)		(0.68	)		(1.00	)
Net Asset Value, End of Period	$	14.83		$	12.38		$	14.63		$	14.02		$	12.58		$	15.41
Total Return(3)		19.69	%(8)		(7.92	)%		12.65	%		15.66	%		(13.96	)%		15.38	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	27,665		$	24,462		$	9,516		$	5,921		$	2,167		$	11
Ratio of Expenses Before Expense Limitation		1.04	%(9)		1.05	%		1.06	%		1.08	%		1.41	%		18.56	%
Ratio of Expenses After Expense Limitation		0.94	%(4)(9)		0.94	%(4)		0.89	%(4)(5)		0.83	%(4)		0.84	%(4)(6)		1.08	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.94	%(4)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income		3.22	%(4)(9)		2.26	%(4)		2.95	%(4)		3.02	%(4)		3.91	%(4)		1.79	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		14	%(8)		43	%		45	%		48	%		48	%		40	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2017, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IS shares. Prior to July 1, 2017, the maximum ratio was 0.84% for Class IS shares.

(6)  Effective March 30, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.84% for Class IS shares. Prior to March 30, 2015, the maximum ratio was 1.08% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Infrastructure Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	12.38		$	14.10
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.22			0.20
Net Realized and Unrealized Gain (Loss)		2.23			(0.81	)
Total from Investment Operations		2.45			(0.61	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.37	)
Net Realized Gain		—			(0.74	)
Total Distributions		—			(1.11	)
Net Asset Value, End of Period	$	14.83		$	12.38
Total Return(3)		19.79	%(6)		(4.54	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	11		$	9
Ratio of Expenses Before Expense Limitation		17.29	%(7)		18.47	%(7)
Ratio of Expenses After Expense Limitation		0.94	%(4)(7)		0.94	%(4)(7)
Ratios of Expenses After Expense Limitation Excluding Non Operating Expenses		0.94	%(4)(7)		N/A
Ratio of Net Investment Income		3.22	%(4)(7)		2.67	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)(7)
Portfolio Turnover Rate		14	%(6)		43	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Infrastructure Portfolio. The Fund seeks to provide both capital appreciation and income.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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),

and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), effective April 30, 2019, MSIM

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Company and MSIM Limited are no longer Sub-Advisers to the Fund, each a wholly-owned subsidiary of Morgan Stanley, 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 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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	—	$	13,370	$	—	$	13,370
Communications		40,917		2,074		—		42,991
Diversified		1,904		22,825		—		24,729
Electricity Transmission & Distribution		41,385		15,583		—		56,968
Oil & Gas Storage & Transportation		95,193		18,359		—		113,552
Renewables		20,564		—		—		20,564
Toll Roads		24,446		22,436		—		46,882
Water		11,828		7,771		—		19,599
Total Common Stocks		236,237		102,418		—		338,655
Short-Term Investments
Investment Company		29,810		—		—		29,810
Repurchase Agreements		—		3,415		—		3,415
Total Short-Term Investments		29,810		3,415		—		33,225
Total Assets	$	266,047	$	105,833	$	—	$	371,880

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject

to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Statement of Operations.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund values the foreign shares at the closing exchange price of the local shares.

5.  Securities Lending: The Fund 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 Fund. The Fund 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 Fund'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 Fund has the right under the securities 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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	14,119	(a)	$	—	$	14,119	(b)(c)	$	0

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

(b) The Fund received cash collateral of approximately $14,669,000, of which approximately $14,585,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2019, there was uninvested cash of approximately $84,000, which is not reflected in the Portfolio of Investments.

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

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2019:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	14,669	$	—	$	—	$	—	$	14,669
Total Borrowings	$	14,669	$	—	$	—	$	—	$	14,669
Gross amount of recognized liabilities for securities lending transactions									$	14,669

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

7.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund 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 Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.97% for Class I shares, 1.21% for Class A shares, 1.78% for Class L shares, 2.07% for Class C shares, 0.94% for Class IS shares and 0.94% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at

least one year from the date of the Fund's prospectus 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, 2019, approximately $146,000 of advisory fees were waived and approximately $114,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

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

Effective April 30, 2019, MSIM Company and MSIM Limited are no longer Sub-Advisers to the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $45,048,000 and $70,358,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months

ended June 30, 2019, advisory fees paid were reduced by approximately $7,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	6,045	$	54,066	$	30,301	$	93

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	29,810

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	7,366	$	18,949	$	11,453	$	17,296

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 in 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 equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(1,636	)	$	1,636

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured

revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 46.8%.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund'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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee was higher than but close to its peer group average and total expense ratio was lower than its peer group average. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

25

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

26

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

28

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFISGISAN
2663897 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Opportunity Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	17
Investment Advisory Agreement Approval	27
Privacy Notice	29
Director and Officer Information	31

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Opportunity Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Opportunity Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Opportunity Portfolio Class I	$	1,000.00	$	1,259.50	$	1,020.23	$	5.15	$	4.61		0.92	%
Global Opportunity Portfolio Class A		1,000.00		1,257.10		1,018.70		6.88		6.16		1.23
Global Opportunity Portfolio Class L		1,000.00		1,257.10		1,018.40		7.22		6.46		1.29
Global Opportunity Portfolio Class C		1,000.00		1,253.10		1,015.22		10.78		9.64		1.93
Global Opportunity Portfolio Class IS		1,000.00		1,259.60		1,020.63		4.71		4.21		0.84
Global Opportunity Portfolio Class IR		1,000.00		1,259.70		1,020.63		4.71		4.21		0.84

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Opportunity Portfolio

	Shares		Value (000)
Common Stocks (92.0%)
Argentina (1.2%)
Globant SA (a)		400,053	$	40,425
China (12.6%)
China Resources Beer Holdings Co., Ltd. (b)		6,989,333		33,081
Ctrip.com International Ltd. ADR (a)		880,512		32,500
Foshan Haitian Flavouring & Food Co., Ltd., Class A		3,658,976		55,915
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd., Class A		1,963,447		34,794
Meituan Dianping, Class B (a)(b)		6,606,700		57,969
TAL Education Group ADR (a)		5,622,668		214,224
				428,483
Denmark (4.8%)
DSV A/S		1,649,526		161,949
France (3.3%)
Hermes International		156,062		112,558
Hong Kong (0.9%)
Haidilao International Holding Ltd. (c)		7,318,000		30,621
India (4.4%)
HDFC Bank Ltd.		4,225,795		150,046
Italy (3.7%)
Moncler SpA		2,925,914		125,097
Japan (4.6%)
Calbee, Inc.		1,484,200		39,996
Keyence Corp.		149,300		91,751
Nihon M&A Center, Inc.		948,900		22,843
				154,590
Korea, Republic of (0.6%)
NAVER Corp.		218,467		21,567
Switzerland (0.9%)
Chocoladefabriken Lindt & Spruengli AG (Registered)		366		29,780
United Kingdom (2.3%)
Fevertree Drinks PLC		1,332,560		39,368
Reckitt Benckiser Group PLC		470,211		37,160
				76,528
United States (52.7%)
Adobe, Inc. (a)		454,453		133,905
Agilon Health Topco, Inc. (a)(d)(e)(f) (acquisition cost — $11,376; acquired 11/7/18)		30,083		11,658
Alphabet, Inc., Class C (a)		123,722		133,732
Amazon.com, Inc. (a)		118,431		224,265
Booking Holdings, Inc. (a)		60,119		112,706
EPAM Systems, Inc. (a)		616,536		106,722
Facebook, Inc., Class A (a)		581,553		112,240
Farfetch Ltd., Class A (a)		2,382,500		49,556
GrubHub, Inc. (a)		350,567		27,341
Intuitive Surgical, Inc. (a)		99,585		52,237
Martin Marietta Materials, Inc.		214,887		49,448
Mastercard, Inc., Class A		882,769		233,519

	Shares		Value (000)
salesforce.com, Inc. (a)		517,815	$	78,568
ServiceNow, Inc. (a)		501,970		137,826
Spotify Technology SA (a)		345,384		50,502
Uber Technologies, Inc. (a)		868,916		40,300
Uber Technologies, Inc. (a)(g) (acquisition cost — $8,232; acquired 12/3/15)		168,793		7,372
Visa, Inc., Class A		771,427		133,881
Vulcan Materials Co.		370,317		50,848
Zillow Group, Inc., Class A (a)		599,405		27,429
Zillow Group, Inc., Class C (a)		199,211		9,241
				1,783,296
Total Common Stocks (Cost $2,130,804)				3,114,940
Preferred Stocks (0.3%)
United States (0.3%)
Airbnb, Inc. Series D (a)(d)(e)(f) (acquisition cost — $1,594; acquired 4/16/14)		39,153		5,009
Magic Leap Series C (a)(d)(e)(f) (acquisition cost — $3,175; acquired 12/22/15)		137,829		3,721
Total Preferred Stocks (Cost $4,769)				8,730
Short-Term Investment (7.9%)
Investment Company (7.9%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $268,393)		268,393,445		268,393
Total Investments Excluding Purchased Options (100.2%) (Cost $2,403,966)				3,392,063
Total Purchased Options Outstanding (0.1%) (Cost $11,316)				3,446
Total Investments (100.3%) (Cost $2,415,282) (h)(i)				3,395,509
Liabilities in Excess of Other Assets (–0.3%)				(8,856	)
Net Assets (100.0%)			$	3,386,653

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

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

(d)  Security has been deemed illiquid at June 30, 2019.

(e)  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 Fund 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, 2019 amounts to approximately $20,388,000 and represents 0.6% of net assets.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Opportunity Portfolio

(f)  At June 30, 2019, the Fund held fair valued securities valued at approximately $20,388,000, representing 0.6% 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 Company's (as defined herein) Directors.

(g)  Security has been deemed by the investment manager to be illiquid and is subject to restrictions on resale. At June 30, 2019, this security amounted to approximately $7,372,000, which represents 0.2% of net assets of the Fund.

(h)  The approximate fair value and percentage of net assets, $894,449,000 and 26.4%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(i)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $1,022,501,000 and the aggregate gross unrealized depreciation is approximately $42,274,000, resulting in net unrealized appreciation of approximately $980,227,000.

ADR  American Depositary Receipt.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2019:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.58	Jan-20		491,307,627		491,308	$	1,133	$	2,515	$	(1,382	)
Royal Bank of Scotland	USD/CNH	CNH	7.78	Jul-19		583,418,790		583,419		1		2,843		(2,842	)
Royal Bank of Scotland	USD/CNH	CNH	7.85	Jun-20		634,542,637		634,543		2,071		3,274		(1,203	)
Royal Bank of Scotland	USD/CNH	CNH	8.00	Oct-19		456,373,516		456,374		241		2,684		(2,443	)
									$	3,446	$	11,316	$	(7,870	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		23.1	%
Internet & Direct Marketing Retail		15.0
Information Technology Services		14.0
Software		11.5
Interactive Media & Services		9.0
Short-Term Investments		7.9
Textiles, Apparel & Luxury Goods		7.0
Diversified Consumer Services		6.3
Road & Rail		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.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Opportunity Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $2,146,889)	$	3,127,116
Investment in Security of Affiliated Issuer, at Value (Cost $268,393)		268,393
Total Investments in Securities, at Value (Cost $2,415,282)		3,395,509
Foreign Currency, at Value (Cost $919)		920
Receivable for Fund Shares Sold		4,863
Receivable for Investments Sold		1,090
Dividends Receivable		918
Receivable from Affiliate		495
Tax Reclaim Receivable		423
Other Assets		301
Total Assets		3,404,519
Liabilities:
Payable for Advisory Fees		5,681
Due to Broker		3,780
Deferred Capital Gain Country Tax		2,650
Payable for Investments Purchased		2,501
Payable for Fund Shares Redeemed		2,312
Payable for Shareholder Services Fees — Class A		200
Payable for Distribution and Shareholder Services Fees — Class L		10
Payable for Distribution and Shareholder Services Fees — Class C		175
Payable for Administration Fees		215
Payable for Sub Transfer Agency Fees — Class I		22
Payable for Sub Transfer Agency Fees — Class A		113
Payable for Sub Transfer Agency Fees — Class L		2
Payable for Sub Transfer Agency Fees — Class C		6
Payable for Transfer Agency Fees — Class I		4
Payable for Transfer Agency Fees — Class A		94
Payable for Transfer Agency Fees — Class L		15
Payable for Transfer Agency Fees — Class C		4
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Professional Fees		50
Other Liabilities		32
Total Liabilities		17,866
Net Assets	$	3,386,653
Net Assets Consist of:
Paid-in-Capital	$	2,466,365
Total Distributable Earnings		920,288
Net Assets	$	3,386,653

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Opportunity Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	2,018,340
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		74,537,060
Net Asset Value, Offering and Redemption Price Per Share	$	27.08
CLASS A:
Net Assets	$	998,766
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		38,174,003
Net Asset Value, Redemption Price Per Share	$	26.16
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.45
Maximum Offering Price Per Share	$	27.61
CLASS L:
Net Assets	$	40,135
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,554,558
Net Asset Value, Offering and Redemption Price Per Share	$	25.82
CLASS C:
Net Assets	$	219,937
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		8,745,883
Net Asset Value, Offering and Redemption Price Per Share	$	25.15
CLASS IS:
Net Assets	$	41,094
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,515,065
Net Asset Value, Offering and Redemption Price Per Share	$	27.12
CLASS IR:
Net Assets	$	68,381
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,517,723
Net Asset Value, Offering and Redemption Price Per Share	$	27.16

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Opportunity Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $664 of Foreign Taxes Withheld)	$	8,501
Dividends from Security of Affiliated Issuer (Note G)		2,462
Total Investment Income		10,963
Expenses:
Advisory Fees (Note B)		10,817
Shareholder Services Fees — Class A (Note D)		1,144
Distribution and Shareholder Services Fees — Class L (Note D)		142
Distribution and Shareholder Services Fees — Class C (Note D)		954
Sub Transfer Agency Fees — Class I		642
Sub Transfer Agency Fees — Class A		503
Sub Transfer Agency Fees — Class L		10
Sub Transfer Agency Fees — Class C		77
Administration Fees (Note C)		1,173
Transfer Agency Fees — Class I (Note E)		18
Transfer Agency Fees — Class A (Note E)		126
Transfer Agency Fees — Class L (Note E)		18
Transfer Agency Fees — Class C (Note E)		8
Transfer Agency Fees — Class IS (Note E)		1
Transfer Agency Fees — Class IR (Note E)		1
Custodian Fees (Note F)		147
Registration Fees		114
Shareholder Reporting Fees		87
Professional Fees		72
Directors' Fees and Expenses		34
Pricing Fees		2
Other Expenses		31
Expenses Before Non Operating Expenses		16,121
Bank Overdraft Expense		1
Total Expenses		16,122
Rebate from Morgan Stanley Affiliate (Note G)		(211	)
Distribution Fees — Class L Shares Waived (Note D)		(85	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Net Expenses		15,825
Net Investment Loss		(4,862	)
Realized Gain (Loss):
Investments Sold		(19,267	)
Foreign Currency Translation		37
Net Realized Loss		(19,230	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $2,273)		670,206
Foreign Currency Translation		(9	)
Net Change in Unrealized Appreciation (Depreciation)		670,197
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		650,967
Net Increase in Net Assets Resulting from Operations	$	646,105

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Opportunity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(4,862	)	$	(12,237	)
Net Realized Loss		(19,230	)		(26,956	)
Net Change in Unrealized Appreciation (Depreciation)		670,197			(199,476	)
Net Increase (Decrease) in Net Assets Resulting from Operations		646,105			(238,669	)
Dividends and Distributions to Shareholders:
Class I		—			(9,846	)
Class A		—			(7,319	)
Class L		—			(294	)
Class C		—			(1,269	)
Class IS		—			(438	)
Class IR		—			(—	@)(a)
Total Dividends and Distributions to Shareholders		—			(19,166	)
Capital Share Transactions:(1)
Class I:
Subscribed		515,001			1,221,941
Distributions Reinvested		—			9,644
Redeemed		(209,282	)		(639,457	)
Class A:
Subscribed		121,623			467,352
Distributions Reinvested		—			7,236
Redeemed		(117,414	)		(393,036	)
Class L:
Exchanged		45			247
Distributions Reinvested		—			275
Redeemed		(2,367	)		(4,377	)
Class C:
Subscribed		38,282			107,428
Distributions Reinvested		—			1,268
Redeemed		(19,418	)		(33,797	)
Class IS:
Subscribed		36,514			65,885
Distributions Reinvested		—			438
Redeemed		(135	)		(66,763	)
Class IR:
Subscribed		—			66,544	(a)
Net Increase in Net Assets Resulting from Capital Share Transactions		362,849			810,828
Total Increase in Net Assets		1,008,954			552,993
Net Assets:
Beginning of Period		2,377,699			1,824,706
End of Period	$	3,386,653		$	2,377,699

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Opportunity Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		20,713			49,756
Shares Issued on Distributions Reinvested		—			373
Shares Redeemed		(8,358	)		(27,089	)
Net Increase in Class I Shares Outstanding		12,355			23,040
Class A:
Shares Subscribed		5,060			19,389
Shares Issued on Distributions Reinvested		—			289
Shares Redeemed		(4,877	)		(16,730	)
Net Increase in Class A Shares Outstanding		183			2,948
Class L:
Shares Exchanged		2			10
Shares Issued on Distributions Reinvested		—			11
Shares Redeemed		(98	)		(187	)
Net Decrease in Class L Shares Outstanding		(96	)		(166	)
Class C:
Shares Subscribed		1,622			4,605
Shares Issued on Distributions Reinvested		—			52
Shares Redeemed		(830	)		(1,526	)
Net Increase in Class C Shares Outstanding		792			3,131
Class IS:
Shares Subscribed		1,420			2,537
Shares Issued on Distributions Reinvested		—			17
Shares Redeemed		(5	)		(2,526	)
Net Increase in Class IS Shares Outstanding		1,415			28
Class IR:
Shares Subscribed		—			2,518	(a)

(a)  For the period June 15, 2018 through December 31, 2018.

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Opportunity Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	21.50		$	22.94		$	15.41		$	16.36		$	13.98		$	13.65
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.02	)		(0.07	)		(0.06	)		(0.05	)		(0.05	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		5.60			(1.20	)		7.68			0.18			2.64			1.26
Total from Investment Operations		5.58			(1.27	)		7.62			0.13			2.59			1.20
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.17	)		(0.09	)		(1.08	)		(0.21	)		(0.87	)
Net Asset Value, End of Period	$	27.08		$	21.50		$	22.94		$	15.41		$	16.36		$	13.98
Total Return(3)		25.95	%(7)		(5.66	)%		49.44	%		1.05	%		18.50	%		9.04	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,018,340		$	1,337,133		$	898,008		$	255,187		$	238,920		$	11,037
Ratio of Expenses Before Expense Limitation		N/A			N/A			0.99	%		1.07	%		1.20	%		2.47	%
Ratio of Expenses After Expense Limitation		0.92	%(4)(8)		0.94	%(4)(6)		0.79	%(4)		0.80	%(4)		0.98	%(4)(5)		1.17	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.92	%(4)(8)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(0.17	)%(4)(8)		(0.30	)%(4)		(0.31	)%(4)		(0.34	)%(4)		(0.33	)%(4)		(0.42	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		11	%(7)		28	%		30	%		37	%		115	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Effective December 7, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.81% for Class I shares. Prior to December 7, 2015, the maximum ratio was 1.10% for Class I shares. Prior to January 23, 2015, the maximum ratio was 1.25% for Class I shares.

(6)  Effective January 1, 2018, 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 January 1, 2018, the maximum ratio was 0.81% for Class I shares.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Opportunity Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	20.81		$	22.28		$	15.01		$	16.03		$	13.75		$	13.48
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.06	)		(0.14	)		(0.12	)		(0.11	)		(0.10	)		(0.11	)
Net Realized and Unrealized Gain (Loss)		5.41			(1.16	)		7.48			0.17			2.59			1.25
Total from Investment Operations		5.35			(1.30	)		7.36			0.06			2.49			1.14
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.17	)		(0.09	)		(1.08	)		(0.21	)		(0.87	)
Net Asset Value, End of Period	$	26.16		$	20.81		$	22.28		$	15.01		$	16.03		$	13.75
Total Return(3)		25.71	%(7)		(5.96	)%		49.03	%		0.62	%		18.16	%		8.55	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	998,766		$	790,571		$	780,705		$	340,092		$	347,683		$	12,952
Ratio of Expenses Before Expense Limitation		N/A			N/A			1.32	%		1.41	%		1.50	%		2.86	%
Ratio of Expenses After Expense Limitation		1.23	%(4)(8)		1.26	%(4)(6)		1.12	%(4)		1.17	%(4)		1.25	%(4)(5)		1.56	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.23	%(4)(8)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(0.50	)%(4)(8)		(0.59	)%(4)		(0.63	)%(4)		(0.70	)%(4)		(0.64	)%(4)		(0.82	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		11	%(7)		28	%		30	%		37	%		115	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Effective December 7, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.23% for Class A Shares. Prior to December 7, 2015, the maximum ratio was 1.45% for Class A Share. Prior to January 23, 2015, the maximum ratio was 1.60% for class A shares.

(6)  Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to January 1, 2018, the maximum ratio was 1.23% for Class A shares.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Opportunity Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	20.54		$	22.01		$	14.84		$	15.87		$	13.62		$	13.38
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.07	)		(0.15	)		(0.13	)		(0.12	)		(0.11	)		(0.12	)
Net Realized and Unrealized Gain (Loss)		5.35			(1.15	)		7.39			0.17			2.57			1.23
Total from Investment Operations		5.28			(1.30	)		7.26			0.05			2.46			1.11
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.17	)		(0.09	)		(1.08	)		(0.21	)		(0.87	)
Net Asset Value, End of Period	$	25.82		$	20.54		$	22.01		$	14.84		$	15.87		$	13.62
Total Return(3)		25.71	%(7)		(6.04	)%		48.91	%		0.56	%		18.03	%		8.46	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	40,135		$	33,913		$	39,979		$	30,133		$	34,628		$	1,091
Ratio of Expenses Before Expense Limitation		1.75	%(8)		1.78	%		1.86	%		1.93	%		2.03	%		3.52	%
Ratio of Expenses After Expense Limitation		1.29	%(4)(8)		1.32	%(4)(6)		1.20	%(4)		1.25	%(4)		1.30	%(4)(5)		1.64	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.29	%(4)(8)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(0.55	)%(4)(8)		(0.65	)%(4)		(0.67	)%(4)		(0.79	)%(4)		(0.70	)%(4)		(0.87	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		11	%(7)		28	%		30	%		37	%		115	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Effective January 23, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.50% for Class L shares. Prior to January 23, 2015, the maximum ratio was 1.65% for Class L shares.

(6)  Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.40% for Class L shares. Prior to January 1, 2018, the maximum ratio was 1.50% for Class L shares.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Opportunity Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	20.07		$	21.64		$	14.69		$	15.80		$	15.25
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.14	)		(0.30	)		(0.26	)		(0.21	)		(0.15	)
Net Realized and Unrealized Gain (Loss)		5.22			(1.10	)		7.30			0.18			0.91
Total from Investment Operations		5.08			(1.40	)		7.04			(0.03	)		0.76
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.17	)		(0.09	)		(1.08	)		(0.21	)
Net Asset Value, End of Period	$	25.15		$	20.07		$	21.64		$	14.69		$	15.80
Total Return(4)		25.31	%(7)		(6.61	)%		47.92	%		0.05	%		4.95	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	219,937		$	159,642		$	104,364		$	33,801		$	20,475
Ratio of Expenses Before Expense Limitation		N/A			N/A			2.01	%		2.08	%		2.22	%(8)
Ratio of Expenses After Expense Limitation		1.93	%(5)(8)		1.95	%(5)(6)		1.81	%(5)		1.84	%(5)		2.03	%(5)(8)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.93	%(5)(8)		N/A			N/A			N/A			N/A
Ratio of Net Investment Loss		(1.18	)%(5)(8)		(1.30	)%(5)		(1.33	)%(5)		(1.38	)%(5)		(1.40	)%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.01	%		0.01	%		0.01	%(8)
Portfolio Turnover Rate		11	%(7)		28	%		30	%		37	%		115	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income Loss reflect the rebate of certain Fund 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."

(6)  Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class C shares. Prior to January 1, 2018, the maximum ratio was 2.20% for Class C shares.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Opportunity Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	21.53		$	23.00		$	15.44		$	16.38		$	13.99		$	13.65
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.02			(0.00	)(3)		(0.05	)		(0.06	)		(0.05	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		5.57			(1.30	)		7.70			0.20			2.65			1.27
Total from Investment Operations		5.59			(1.30	)		7.65			0.14			2.60			1.21
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.17	)		(0.09	)		(1.08	)		(0.21	)		(0.87	)
Net Asset Value, End of Period	$	27.12		$	21.53		$	23.00		$	15.44		$	16.38		$	13.99
Total Return(4)		25.96	%(8)		(5.78	)%		49.54	%		1.11	%		18.64	%		8.96	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	41,094		$	2,156		$	1,650		$	23		$	804		$	11
Ratio of Expenses Before Expense Limitation		0.88	%(9)		N/A			1.24	%		3.82	%		3.56	%		19.50	%
Ratio of Expenses After Expense Limitation		0.84	%(5)(9)		0.88	%(5)(7)		0.71	%(5)		0.71	%(5)		0.77	%(5)(6)		1.17	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.84	%(5)(9)		N/A			N/A			N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		0.12	%(5)(9)		(0.02	)%(5)		(0.23	)%(5)		(0.41	)%(5)		(0.28	)%(5)		(0.42	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Portfolio Turnover Rate		11	%(8)		28	%		30	%		37	%		115	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective December 7, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.72% for Class IS shares. Prior to December 7, 2015, the maximum ratio was 1.03% for Class IS shares. Prior to January 23, 2015, the maximum ratio was 1.18% for Class IS shares.

(7)  Effective January 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.95% for Class IS shares. Prior to January 1, 2018, the maximum ratio was 0.72% for Class IS shares.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Opportunity Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	21.56		$	26.67
Income (Loss) from Investment Operations:
Net Investment Loss		(0.01	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		5.61			(4.88	)
Total from Investment Operations		5.60			(4.94	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.17	)
Net Asset Value, End of Period	$	27.16		$	21.56
Total Return(3)		25.97	%(5)		(18.63	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	68,381		$	54,284
Ratio of Expenses Before Expense Limitation		N/A			N/A
Ratio of Expenses After Expense Limitation		0.84	%(4)(6)		0.88	%(4)(6)
Ratios of Expenses After Expense Limitation Excluding Non Operating Expenses		0.84	%(4)(6)		N/A
Ratio of Net Investment Loss		(0.10	)%(4)(6)		(0.46	)%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		11	%(5)		28	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS, and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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),

and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) 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 its latest bid and ask

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) 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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's investments as of June 30, 2019:

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
Banks	$	—	$	150,046	$	—	$	150,046
Beverages		—		107,243		—		107,243
Construction Materials		100,296		—		—		100,296
Diversified Consumer Services		214,224		—		—		214,224
Electronic Equipment, Instruments & Components		—		91,751		—		91,751
Entertainment		50,502		—		—		50,502
Food Products		—		125,691		—		125,691
Health Care Equipment & Supplies		52,237		—		—		52,237
Health Care Technology		—		—		11,658		11,658
Hotels, Restaurants & Leisure		—		30,621		—		30,621
Household Products		—		37,160		—		37,160
Information Technology Services		474,122		—		—		474,122
Interactive Media & Services		282,642		21,567		—		304,209
Internet & Direct Marketing Retail		446,368		57,969		—		504,337
Professional Services		—		22,843		—		22,843
Road & Rail		40,300		169,321		—		209,621
Software		390,724		—		—		390,724
Textiles, Apparel & Luxury Goods		—		237,655		—		237,655
Total Common Stocks		2,051,415		1,051,867		11,658		3,114,940
Preferred Stocks
Electronic Equipment, Instruments & Components		—		—		3,721		3,721
Internet & Direct Marketing Retail		—		—		5,009		5,009
Total Preferred Stocks		—		—		8,730		8,730
Call Options Purchased		—		3,446		—		3,446
Short-Term Investment
Investment Company		268,393		—		—		268,393
Total Assets	$	2,319,808	$	1,055,313	$	20,388	$	3,395,509

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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)
Beginning Balance	$	11,394	$	16,235
Purchases		—		—
Sales		—		—
Amortization of discount		—		—
Transfers in		—		—
Transfers out		—		—
Corporate actions		—		(7,372	)
Change in unrealized appreciation (depreciation)		264		(133	)
Realized gains (losses)		—		—
Ending Balance	$	11,658	$	8,730
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2019	$	264	$	281

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (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, 2019. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance. The Fund calculated the weighted averages of the unobservable inputs relative to each investment's fair value as of June 30, 2019.

	Fair Value at June 30, 2019 (000)		Valuation Technique	Unobservable Input	Amount*			Impact to Valuation from an Increase in Input**
Common Stock	$	11,658	Market Transaction Method	Precedent Transaction	$	378.16		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		15.0	%	Decrease
				Perpetual Growth Rate		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/Revenue		0.8	x	Increase
				Discount for Lack of Marketability		10.0	%	Decrease
Preferred Stocks	$	8,730	Market Transaction Method	Precedent Transaction	$	27.00		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		14.5	%	Decrease
				Perpetual Growth Rate		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/Revenue		6.6	x	Increase
				Discount for Lack of Marketability		10.0	%	Decrease

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized

and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund 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 in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency,

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund 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 Fund 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" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	3,446	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(1,993	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(1,869	)(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	3,446	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) 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 Fund 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 Fund 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 potential 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 Fund 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 Fund 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 Fund's net liability may be delayed or denied.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following table presents derivative financial instruments that are subject to enforceable netting arrangements as of June 30, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	1,133		$	—	$	(1,133	)	$	0
Royal Bank of Scotland		2,313			—		(2,313	)		0
Total	$	3,446	(a)	$	—	$	(3,446	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) 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, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	1,636,857,000

5.  Structured Investments: The Fund 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 Fund 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 Fund 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 Fund's illiquidity to the extent that the Fund, at a particular time, may be unable to find qualified buyers for these securities.

6.  Restricted Securities: The Fund 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 Fund 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 Fund, 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 Fund can 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 the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

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

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.

9.  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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $750 million			Next $750 million			Over $1.5 billion
	0.80	%		0.75	%		0.70	%

For the six months ended June 30, 2019, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.72% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.40% for Class L shares, 2.10% for Class C shares, 0.95% for Class IS shares and 0.95% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $1,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares. The Distributor has agreed to waive for at least one year from the date of the Fund's prospectus, the 12b-1 fees on Class L shares of the Fund to the extent it exceeds 0.30% of the average daily net assets of such shares on an annualized basis. For the six months ended June 30, 2019, this waiver amounted to approximately $85,000.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund 's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company as required by the Act.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $470,280,000 and $302,394,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $211,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	122,351	$	430,630	$	284,588	$	2,462

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	268,393

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible

Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	12,718	$	6,448	$	7,000	$	—

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)		Paid-in- Capital (000)
$	7,549	$	(7,549	)

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $23,405,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	4,524	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months

ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 27.7%.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund'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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's management fee was higher than its peer group average and total expense ratio was higher than but close to its peer group average. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

28

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

29

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

31

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGOSAN
2663932 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Real Estate Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	7
Statement of Operations	9
Statements of Changes in Net Assets	10
Financial Highlights	12
Notes to Financial Statements	18
Investment Advisory Agreement Approval	25
Privacy Notice	27
Director and Officer Information	29

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Real Estate Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Real Estate Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Real Estate Portfolio Class I	$	1,000.00	$	1,125.10	$	1,019.84	$	5.27	$	5.01		1.00	%
Global Real Estate Portfolio Class A		1,000.00		1,123.20		1,018.10		7.11		6.76		1.35
Global Real Estate Portfolio Class L		1,000.00		1,119.90		1,015.62		9.72		9.25		1.85
Global Real Estate Portfolio Class C		1,000.00		1,118.80		1,014.38		11.03		10.49		2.10
Global Real Estate Portfolio Class IS		1,000.00		1,126.20		1,020.13		4.96		4.71		0.94
Global Real Estate Portfolio Class IR		1,000.00		1,125.10		1,020.13		4.95		4.71		0.94

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Real Estate Portfolio

	Shares		Value (000)
Common Stocks (98.9%)
Australia (4.1%)
Dexus REIT		616,934	$	5,631
Goodman Group REIT		690,101		7,293
GPT Group (The) REIT		1,178,164		5,095
Mirvac Group REIT		1,842,957		4,057
Scentre Group REIT		2,594,220		7,006
Stockland REIT		621,540		1,821
Vicinity Centres REIT		2,035,606		3,507
				34,410
Austria (0.1%)
Atrium European Real Estate Ltd. (a)		304,568		1,135
Canada (2.0%)
Boardwalk REIT		4,991		152
Crombie Real Estate Investment Trust REIT		117,742		1,354
First Capital Realty, Inc.		368,652		6,153
H&R Real Estate Investment Trust REIT		85,593		1,493
RioCan Real Estate Investment Trust REIT		344,343		6,834
SmartCentres Real Estate Investment Trust REIT		30,514		774
				16,760
China (1.1%)
China Overseas Land & Investment Ltd. (b)		1,130,000		4,170
China Resources Land Ltd. (b)		546,000		2,395
Guangzhou R&F Properties Co., Ltd. H Shares (b)		347,600		669
Longfor Group Holdings Ltd. (b)		656,500		2,478
				9,712
Finland (0.2%)
Kojamo Oyj		90,173		1,345
France (4.9%)
Carmila SA REIT		58,122		1,041
Covivio REIT		21,655		2,267
Gecina SA REIT		43,815		6,557
ICADE REIT		25,625		2,351
Klepierre SA REIT		451,320		15,130
Mercialys SA REIT		181,601		2,398
Unibail-Rodamco-Westfield REIT		75,174		11,262
				41,006
Germany (2.5%)
ADO Properties SA		26,509		1,097
Alstria Office AG REIT		141,371		2,289
Deutsche EuroShop AG		13,875		383
Deutsche Wohnen SE		164,529		6,035
LEG Immobilien AG		12,185		1,374
Vonovia SE		207,225		9,897
				21,075
Hong Kong (10.5%)
Champion REIT		1,903,000		1,583
CK Asset Holdings Ltd.		776,500		6,062
Hongkong Land Holdings Ltd.		2,026,200		13,070
Hysan Development Co., Ltd.		443,014		2,290
Link REIT		1,755,275		21,590

	Shares		Value (000)
New World Development Co., Ltd.		2,527,758	$	3,939
Sino Land Co., Ltd.		1,969,048		3,293
Sun Hung Kai Properties Ltd.		1,105,367		18,772
Swire Properties Ltd.		2,716,900		10,981
Wharf Holdings Ltd. (The)		410,763		1,086
Wharf Real Estate Investment Co., Ltd.		858,075		6,028
				88,694
Ireland (0.3%)
Green REIT PLC		326,604		672
Hibernia REIT PLC		1,255,728		2,069
				2,741
Japan (10.4%)
Activia Properties, Inc. REIT		348		1,514
Advance Residence Investment Corp. REIT		834		2,480
Frontier Real Estate Investment Corp. REIT		224		956
GLP J-REIT		2,518		2,869
Hulic Co., Ltd.		122,700		988
Hulic REIT, Inc.		320		556
Invincible Investment Corp. REIT		897		465
Japan Excellent, Inc. REIT		249		365
Japan Hotel REIT Investment Corp.		3,369		2,714
Japan Real Estate Investment Corp. REIT		1,150		6,998
Japan Retail Fund Investment Corp. REIT		1,983		4,009
Kenedix Office Investment Corp. REIT		153		1,095
Mitsubishi Estate Co., Ltd.		818,800		15,275
Mitsui Fudosan Co., Ltd.		570,200		13,845
Mori Trust Sogo Reit, Inc.		711		1,156
Nippon Building Fund, Inc. REIT		1,363		9,332
Nippon Prologis, Inc. REIT		1,264		2,917
Nomura Real Estate Master Fund, Inc. REIT		2,821		4,338
Orix, Inc. J-REIT		587		1,070
Premier Investment Corp. REIT		978		1,286
Sumitomo Realty & Development Co., Ltd.		266,400		9,526
Tokyo Tatemono Co., Ltd.		33,800		376
United Urban Investment Corp. REIT		2,162		3,621
				87,751
Malta (0.0%)
BGP Holdings PLC (a)(c)(d)		12,867,024		19
Netherlands (0.6%)
Eurocommercial Properties N.V. CVA REIT		134,313		3,590
NSI N.V. REIT		19,082		808
Wereldhave N.V. REIT		27,436		719
				5,117
Norway (0.4%)
Entra ASA		167,715		2,575
Norwegian Property ASA		415,440		580
				3,155
Singapore (1.1%)
Ascendas Real Estate Investment Trust REIT		1,191,500		2,748
CapitaLand Commercial Trust REIT		952,495		1,528
CapitaLand Ltd.		92,000		240

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Real Estate Portfolio

	Shares		Value (000)
Singapore (cont'd)
CapitaLand Mall Trust REIT		1,369,000	$	2,665
Mapletree Logistics Trust REIT		762,000		896
Suntec Real Estate Investment Trust REIT		394,900		567
UOL Group Ltd.		137,776		769
				9,413
Spain (1.0%)
Inmobiliaria Colonial Socimi SA REIT		225,150		2,508
Merlin Properties Socimi SA REIT		429,907		5,964
				8,472
Sweden (0.6%)
Atrium Ljungberg AB, Class B		66,284		1,197
Castellum AB		45,996		880
Hufvudstaden AB, Class A		138,779		2,360
Kungsleden AB		111,832		922
				5,359
Switzerland (0.2%)
PSP Swiss Property AG (Registered)		13,932		1,629
United Kingdom (5.1%)
British Land Co., PLC (The) REIT		1,627,474		11,138
Capital & Counties Properties PLC		347,270		957
Derwent London PLC REIT		95,943		3,798
Grainger PLC		378,825		1,182
Great Portland Estates PLC REIT		398,963		3,468
Hammerson PLC REIT		891,169		3,140
Intu Properties PLC REIT		507,291		492
Land Securities Group PLC REIT		1,130,622		11,976
LXB Retail Properties PLC (a)		1,800,925		—	@
Segro PLC REIT		225,653		2,093
Shaftesbury PLC REIT		39,357		402
St. Modwen Properties PLC		341,001		1,898
Urban & Civic PLC		646,289		2,721
Workspace Group PLC REIT		9,436		105
				43,370
United States (53.8%)
Alexandria Real Estate Equities, Inc. REIT		43,255		6,103
American Campus Communities, Inc. REIT		100,370		4,633
American Homes 4 Rent, Class A REIT		139,392		3,389
Apartment Investment & Management Co., Class A REIT		43,999		2,205
AvalonBay Communities, Inc. REIT		145,132		29,488
Boston Properties, Inc. REIT		208,322		26,874
Brandywine Realty Trust REIT		33,788		484
Brixmor Property Group, Inc. REIT		384,404		6,873
Camden Property Trust REIT		100,455		10,487
Chesapeake Lodging Trust REIT		62,884		1,787
Columbia Property Trust, Inc. REIT		293,508		6,087
Corporate Office Properties Trust REIT		57,043		1,504
Cousins Properties, Inc. REIT		151,850		5,492
CubeSmart REIT		250,084		8,363
DiamondRock Hospitality Co. REIT		1,057,290		10,932
Digital Realty Trust, Inc. REIT		99,090		11,672

	Shares		Value (000)
Duke Realty Corp. REIT		88,800	$	2,807
Equity Residential REIT		202,649		15,385
Essex Property Trust, Inc. REIT		25,532		7,454
Exeter Industrial Value Fund, LP (a)(c)(d)(e)		1,860,000		127
Extra Space Storage, Inc. REIT		43,955		4,664
Gaming and Leisure Properties, Inc. REIT		118,590		4,623
HCP, Inc. REIT		78,684		2,516
Healthcare Realty Trust, Inc. REIT		390,040		12,216
Healthcare Trust of America, Inc., Class A REIT		130,779		3,587
Host Hotels & Resorts, Inc. REIT		995,344		18,135
Hudson Pacific Properties, Inc. REIT		186,836		6,216
Invitation Homes, Inc. REIT		396,830		10,607
JBG SMITH Properties REIT		91,619		3,604
Kilroy Realty Corp. REIT		55,209		4,075
Lexington Realty Trust REIT		172,400		1,622
Life Storage, Inc. REIT		16,834		1,601
Macerich Co. (The) REIT		629,680		21,088
Mack-Cali Realty Corp. REIT		276,487		6,439
Mid-America Apartment Communities, Inc. REIT		46,913		5,525
Paramount Group, Inc. REIT		701,425		9,827
ProLogis, Inc. REIT		344,883		27,625
Public Storage REIT		42,630		10,153
QTS Realty Trust, Inc., Class A REIT		10,329		477
Regency Centers Corp. REIT		170,862		11,403
RLJ Lodging Trust REIT		648,692		11,508
Senior Housing Properties Trust REIT		120,070		993
Simon Property Group, Inc. REIT		306,587		48,980
SL Green Realty Corp. REIT		398,794		32,051
Sunstone Hotel Investors, Inc. REIT		372,239		5,103
UDR, Inc. REIT		89,515		4,018
Ventas, Inc. REIT		16,575		1,133
Vornado Realty Trust REIT		230,902		14,801
Weingarten Realty Investors REIT		114,560		3,141
Welltower, Inc. REIT		59,985		4,891
				454,768
Total Common Stocks (Cost $662,314)				835,931
Short-Term Investment (1.0%)
Investment Company (1.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $8,060)		8,060,236		8,060
Total Investments (99.9%) (Cost $670,374) (f)(g)				843,991
Other Assets in Excess of Liabilities (0.1%)				861
Net Assets (100.0%)			$	844,852

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Real Estate Portfolio

(c)  At June 30, 2019, the Fund held fair valued securities valued at approximately $146,000, representing less than 0.05% 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 Company's (as defined herein) Directors.

(d)  Security has been deemed illiquid at June 30, 2019.

(e)  Restricted security valued at fair value and not registered under the Securities Act of 1933. Exeter Industrial Value Fund, LP was acquired between 11/07 - 4/11 and has a current cost basis of $0. At June 30, 2019, this security had an aggregate market value of approximately $127,000, representing less than 0.05% of net assets.

(f)  The approximate fair value and percentage of net assets, $364,384,000 and 43.1%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(g)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $207,458,000 and the aggregate gross unrealized depreciation is approximately $33,841,000, resulting in net unrealized appreciation of approximately $173,617,000.

@  Value is less than $500.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Diversified		25.4	%
Retail		22.0
Office		18.9
Residential		14.6
Other*		7.6
Lodging/Resorts		6.0
Industrial		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.
6

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $662,314)	$	835,931
Investment in Security of Affiliated Issuer, at Value (Cost $8,060)		8,060
Total Investments in Securities, at Value (Cost $670,374)		843,991
Foreign Currency, at Value (Cost $3,126)		3,130
Receivable for Fund Shares Sold		4,082
Dividends Receivable		3,715
Receivable for Investments Sold		951
Tax Reclaim Receivable		395
Receivable from Affiliate		16
Other Assets		139
Total Assets		856,419
Liabilities:
Payable for Fund Shares Redeemed		8,961
Payable for Advisory Fees		1,690
Payable for Investments Purchased		564
Payable for Sub Transfer Agency Fees — Class I		117
Payable for Sub Transfer Agency Fees — Class A		1
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Administration Fees		57
Payable for Professional Fees		46
Payable for Custodian Fees		38
Payable for Transfer Agency Fees — Class I		5
Payable for Transfer Agency Fees — Class A		5
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		4
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Shareholder Services Fees — Class A		3
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		75
Total Liabilities		11,567
Net Assets	$	844,852
Net Assets Consist of:
Paid-in-Capital	$	665,443
Total Distributable Earnings		179,409
Net Assets	$	844,852

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Real Estate Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	378,162
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		36,555,942
Net Asset Value, Offering and Redemption Price Per Share	$	10.34
CLASS A:
Net Assets	$	13,711
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,331,534
Net Asset Value, Redemption Price Per Share	$	10.30
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.57
Maximum Offering Price Per Share	$	10.87
CLASS L:
Net Assets	$	1,366
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		134,136
Net Asset Value, Offering and Redemption Price Per Share	$	10.18
CLASS C:
Net Assets	$	486
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		48,726
Net Asset Value, Offering and Redemption Price Per Share	$	9.98
CLASS IS:
Net Assets	$	451,118
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		43,601,042
Net Asset Value, Offering and Redemption Price Per Share	$	10.35
CLASS IR:
Net Assets	$	9
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		902
Net Asset Value, Offering and Redemption Price Per Share	$	10.34

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $721 of Foreign Taxes Withheld)	$	17,564
Dividends from Security of Affiliated Issuer (Note G)		101
Total Investment Income		17,665
Expenses:
Advisory Fees (Note B)		3,539
Administration Fees (Note C)		354
Sub Transfer Agency Fees — Class I		246
Sub Transfer Agency Fees — Class A		7
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Custodian Fees (Note F)		77
Professional Fees		66
Registration Fees		40
Shareholder Reporting Fees		39
Shareholder Services Fees — Class A (Note D)		17
Distribution and Shareholder Services Fees — Class L (Note D)		5
Distribution and Shareholder Services Fees — Class C (Note D)		2
Transfer Agency Fees — Class I (Note E)		7
Transfer Agency Fees — Class A (Note E)		6
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		5
Transfer Agency Fees — Class IR (Note E)		1
Directors' Fees and Expenses		17
Pricing Fees		6
Other Expenses		18
Expenses Before Non Operating Expenses		4,454
Bank Overdraft Expense		14
Total Expenses		4,468
Reimbursement of Class Specific Expenses — Class I (Note B)		(136	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(4	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(8	)
Net Expenses		4,316
Net Investment Income		13,349
Realized Gain:
Investments Sold		21,530
Foreign Currency Translation		14
Net Realized Gain		21,544
Change in Unrealized Appreciation (Depreciation):
Investments		73,561
Foreign Currency Translation		(1	)
Net Change in Unrealized Appreciation (Depreciation)		73,560
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		95,104
Net Increase in Net Assets Resulting from Operations	$	108,453

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	13,349		$	31,927
Net Realized Gain		21,544			97,874
Net Change in Unrealized Appreciation (Depreciation)		73,560			(211,792	)
Net Increase (Decrease) in Net Assets Resulting from Operations		108,453			(81,991	)
Dividends and Distributions to Shareholders:
Class I		—			(43,049	)
Class A		—			(1,425	)
Class L		—			(74	)
Class C		—			(44	)
Class IS		—			(59,675	)
Class IR		—			(1	)
Total Dividends and Distributions to Shareholders		—			(104,268	)
Capital Share Transactions:(1)
Class I:
Subscribed		29,349			88,211
Distributions Reinvested		—			32,086
Redeemed		(57,977	)		(235,198	)
Class A:
Subscribed		808			1,604
Distributions Reinvested		—			1,415
Redeemed		(1,450	)		(5,260	)
Class L:
Exchanged		—			518
Distributions Reinvested		—			74
Redeemed		(1	)		(567	)
Class C:
Subscribed		10			200
Distributions Reinvested		—			43
Redeemed		(3	)		(53	)
Class IS:
Subscribed		32,682			106,012
Distributions Reinvested		—			57,230
Redeemed		(160,788	)		(588,634	)
Class IR:
Subscribed		—			10	(a)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(157,370	)		(542,309	)
Total Decrease in Net Assets		(48,917	)		(728,568	)
Net Assets:
Beginning of Period		893,769			1,622,337
End of Period	$	844,852		$	893,769

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Real Estate Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		2,852			8,284
Shares Issued on Distributions Reinvested		—			3,281
Shares Redeemed		(5,642	)		(21,915	)
Net Decrease in Class I Shares Outstanding		(2,790	)		(10,350	)
Class A:
Shares Subscribed		79			149
Shares Issued on Distributions Reinvested		—			145
Shares Redeemed		(141	)		(495	)
Net Decrease in Class A Shares Outstanding		(62	)		(201	)
Class L:
Shares Exchanged		—			57
Shares Issued on Distributions Reinvested		—			8
Shares Redeemed		(—	@@)		(53	)
Net Increase (Decrease) in Class L Shares Outstanding		(—	@@)		12
Class C:
Shares Subscribed		1			18
Shares Issued on Distributions Reinvested		—			5
Shares Redeemed		(—	@@)		(5	)
Net Increase in Class C Shares Outstanding		1			18
Class IS:
Shares Subscribed		3,156			9,846
Shares Issued on Distributions Reinvested		—			5,868
Shares Redeemed		(15,872	)		(53,663	)
Net Decrease in Class IS Shares Outstanding		(12,716	)		(37,949	)
Class IR:
Shares Subscribed		—			1	(a)

(a)  For the period June 15, 2018 through December 31, 2018.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Real Estate Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	9.19		$	11.13		$	10.76		$	10.80		$	11.10		$	9.91
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.15			0.27			0.25			0.21			0.18			0.20
Net Realized and Unrealized Gain (Loss)		1.00			(1.11	)		0.80			0.15			(0.28	)		1.19
Total from Investment Operations		1.15			(0.84	)		1.05			0.36			(0.10	)		1.39
Distributions from and/or in Excess of:
Net Investment Income		—			(0.51	)		(0.15	)		(0.34	)		(0.20	)		(0.20	)
Net Realized Gain		—			(0.59	)		(0.53	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			(0.02	)		—			—
Total Distributions		—			(1.10	)		(0.68	)		(0.40	)		(0.20	)		(0.20	)
Net Asset Value, End of Period	$	10.34		$	9.19		$	11.13		$	10.76		$	10.80		$	11.10
Total Return(3)		12.51	%(7)		(7.92	)%		9.73	%		3.42	%		(0.94	)%		14.08	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	378,162		$	361,680		$	553,319		$	471,790		$	1,192,624		$	1,828,656
Ratio of Expenses Before Expense Limitation		1.07	%(8)		1.10	%		1.07	%		1.04	%		1.05	%		1.05	%
Ratio of Expenses After Expense Limitation		1.00	%(4)(8)		1.03	%(4)(5)		1.05	%(4)		1.04	%(4)		1.05	%(4)		1.05	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.00	%(4)(8)		1.03	%(4)		1.05	%(4)		N/A			1.05	%(4)		N/A
Ratio of Net Investment Income		2.98	%(4)(8)		2.54	%(4)		2.20	%(4)		1.88	%(4)		1.65	%(4)		1.85	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		13	%(7)		38	%		39	%		26	%		29	%		32	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2018, 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, 2018, the maximum ratio was 1.05% for Class I shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Real Estate Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	9.17		$	11.10		$	10.71		$	10.74		$	11.05		$	9.86
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.13			0.23			0.17			0.17			0.16			0.17
Net Realized and Unrealized Gain (Loss)		1.00			(1.10	)		0.84			0.16			(0.30	)		1.19
Total from Investment Operations		1.13			(0.87	)		1.01			0.33			(0.14	)		1.36
Distributions from and/or in Excess of:
Net Investment Income		—			(0.47	)		(0.09	)		(0.30	)		(0.17	)		(0.17	)
Net Realized Gain		—			(0.59	)		(0.53	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			(0.02	)		—			—
Total Distributions		—			(1.06	)		(0.62	)		(0.36	)		(0.17	)		(0.17	)
Net Asset Value, End of Period	$	10.30		$	9.17		$	11.10		$	10.71		$	10.74		$	11.05
Total Return(3)		12.32	%(7)		(8.19	)%		9.44	%		3.12	%		(1.25	)%		13.88	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13,711		$	12,775		$	17,701		$	92,730		$	135,517		$	105,766
Ratio of Expenses Before Expense Limitation		1.38	%(8)		1.39	%		N/A			1.36	%		N/A			N/A
Ratio of Expenses After Expense Limitation		1.35	%(4)(8)		1.38	%(4)(5)		1.35	%(4)		1.35	%(4)		1.34	%(4)		1.31	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.35	%(4)(8)		1.38	%(4)		1.35	%(4)		N/A			1.34	%(4)		N/A
Ratio of Net Investment Income		2.65	%(4)(8)		2.18	%(4)		1.55	%(4)		1.51	%(4)		1.47	%(4)		1.60	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		13	%(7)		38	%		39	%		26	%		29	%		32	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to July 1, 2018, the maximum ratio was 1.40% for Class A shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Real Estate Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	9.09		$	11.01		$	10.64		$	10.61		$	10.91		$	9.74
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.17			0.14			0.12			0.12			0.12
Net Realized and Unrealized Gain (Loss)		0.98			(1.09	)		0.81			0.16			(0.31	)		1.17
Total from Investment Operations		1.09			(0.92	)		0.95			0.28			(0.19	)		1.29
Distributions from and/or in Excess of:
Net Investment Income		—			(0.41	)		(0.05	)		(0.19	)		(0.11	)		(0.12	)
Net Realized Gain		—			(0.59	)		(0.53	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			(0.02	)		—			—
Total Distributions		—			(1.00	)		(0.58	)		(0.25	)		(0.11	)		(0.12	)
Net Asset Value, End of Period	$	10.18		$	9.09		$	11.01		$	10.64		$	10.61		$	10.91
Total Return(3)		11.99	%(7)		(8.74	)%		8.89	%		2.65	%		(1.71	)%		13.27	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,366		$	1,220		$	1,344		$	1,483		$	4,509		$	4,755
Ratio of Expenses Before Expense Limitation		1.88	%(8)		2.02	%		1.93	%		1.82	%		N/A			N/A
Ratio of Expenses After Expense Limitation		1.85	%(4)(8)		1.88	%(4)(5)		1.90	%(4)		1.82	%(4)		1.78	%(4)		1.79	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.85	%(4)(8)		1.88	%(4)		1.90	%(4)		N/A			1.77	%(4)		N/A
Ratio of Net Investment Income		2.16	%(4)(8)		1.64	%(4)		1.32	%(4)		1.07	%(4)		1.12	%(4)		1.08	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		13	%(7)		38	%		39	%		26	%		29	%		32	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to July 1, 2018, the maximum ratio was 1.90% for Class L shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Real Estate Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	8.92		$	10.83		$	10.49		$	10.56		$	11.23
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.09			0.16			0.12			0.08			0.07
Net Realized and Unrealized Gain (Loss)		0.97			(1.09	)		0.78			0.16			(0.60	)
Total from Investment Operations		1.06			(0.93	)		0.90			0.24			(0.53	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.39	)		(0.03	)		(0.25	)		(0.14	)
Net Realized Gain		—			(0.59	)		(0.53	)		(0.04	)		—
Paid-in-Capital		—			—			—			(0.02	)		—
Total Distributions		—			(0.98	)		(0.56	)		(0.31	)		(0.14	)
Net Asset Value, End of Period	$	9.98		$	8.92		$	10.83		$	10.49		$	10.56
Total Return(4)		11.88	%(8)		(8.93	)%		8.54	%		2.31	%		(4.71	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	486		$	428		$	327		$	305		$	191
Ratio of Expenses Before Expense Limitation		2.42	%(9)		2.47	%		2.69	%		2.86	%		3.25	%(9)
Ratio of Expenses After Expense Limitation		2.10	%(5)(9)		2.12	%(5)(6)		2.15	%(5)		2.15	%(5)		2.15	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		2.10	%(5)(9)		2.12	%(5)		2.15	%(5)		N/A			2.15	%(5)(9)
Ratio of Net Investment Income		1.92	%(5)(9)		1.53	%(5)		1.11	%(5)		0.75	%(5)		1.01	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		13	%(8)		38	%		39	%		26	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class C shares. Prior to July 1, 2018, the maximum ratio was 2.15% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Real Estate Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	9.19		$	11.13		$	10.76		$	10.81		$	11.11		$	9.91
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.16			0.28			0.25			0.22			0.20			0.22
Net Realized and Unrealized Gain (Loss)		1.00			(1.11	)		0.81			0.15			(0.29	)		1.19
Total from Investment Operations		1.16			(0.83	)		1.06			0.37			(0.09	)		1.41
Distributions from and/or in Excess of:
Net Investment Income		—			(0.52	)		(0.16	)		(0.36	)		(0.21	)		(0.21	)
Net Realized Gain		—			(0.59	)		(0.53	)		(0.04	)		—			—
Paid-in-Capital		—			—			—			(0.02	)		—			—
Total Distributions		—			(1.11	)		(0.69	)		0.42			(0.21	)		(0.21	)
Net Asset Value, End of Period	$	10.35		$	9.19		$	11.13		$	10.76		$	10.81		$	11.11
Total Return(3)		12.62	%(7)		(7.83	)%		9.80	%		3.45	%		(0.84	)%		14.27	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	451,118		$	517,658		$	1,049,646		$	1,255,498		$	1,012,883		$	586,511
Ratio of Expenses Before Expense Limitation		0.94	%(8)		N/A			N/A			0.97	%		N/A			0.96	%
Ratio of Expenses After Expense Limitation		0.94	%(4)(8)		0.95	%(4)(5)		0.97	%(4)		0.96	%(4)		0.97	%(4)		0.96	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.94	%(4)(8)		0.95	%(4)		0.97	%(4)		N/A			0.97	%(4)		N/A
Ratio of Net Investment Income		3.06	%(4)(8)		2.58	%		2.26	%(4)		2.01	%(4)		1.78	%(4)		2.01	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		13	%(7)		38	%		39	%		26	%		29	%		32	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been 0.01% higher and the Ratio of Net Investment Income would have been 0.01% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IS shares. Prior to July 1, 2018, the maximum ratio was 0.99% for Class IS shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Real Estate Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	9.19		$	11.09
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.16			0.23
Net Realized and Unrealized Gain (Loss)		0.99			(1.02	)
Total from Investment Operations		1.15			(0.79	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.52	)
Net Realized Gain		—			(0.59	)
Total Distributions		—			(1.11	)
Net Asset Value, End of Period	$	10.34		$	9.19
Total Return(3)		12.51	%(7)		(7.49	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	9		$	8
Ratio of Expenses Before Expense Limitation		18.76	%(8)		18.72	%(8)
Ratio of Expenses After Expense Limitation		0.94	%(4)(8)		0.94	%(4)(5)(8)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.94	%(4)(8)		N/A
Ratio of Net Investment Income		3.08	%(4)(8)		3.94	%(4)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)(8)
Portfolio Turnover Rate		13	%(7)		38	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IR shares. Prior to July 1, 2018, the maximum ratio was 0.99% for Class IR shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Real Estate Portfolio. The Fund seeks to provide current income and capital appreciation. The Fund has capital subscription commitments to an investee company for this same purpose, the details of which are disclosed in the Unfunded Commitments note.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS, and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), each a wholly-owned subsidiary of Morgan Stanley, 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 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; (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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Fund invests a significant portion of its assets in securities of real estate investment trusts ("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 Fund.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's investments as of June 30, 2019:

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	$	43,109	$	171,233	$	—	$	214,342
Health Care		25,336		—		—		25,336
Industrial		30,432		16,068		127		46,627
Industrial/Office Mixed		1,622		4,550		—		6,172
Lodging/Resorts		47,465		3,179		—		50,644
Office		98,713		60,356		—		159,069
Residential		93,343		29,975		19		123,337
Retail		106,600		79,023		—		185,623
Self Storage		24,781		—		—		24,781
Total Common Stocks		471,401		364,384		146		835,931
Short-Term Investment
Investment Company		8,060		—		—		8,060
Total Assets	$	479,461	$	364,384	$	146	$	843,991

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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

	Common Stocks (000)
Beginning Balance	$	145
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		1
Realized gains (losses)		—
Ending Balance	$	146
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2019	$	1

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, 2019. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance.

	Fair Value at June 30, 2019 (000)		Valuation Technique	Unobservable Input	Amount*			Impact to Valuation from an increase in input**
Common Stocks	$	146	Reported Capital balance, adjustments for NAV practical expedient; including adjustments for subsequent Capital Calls, Return of Capital and Significant Market Changes between last Capital Statement and Valuation Date	Adjusted Capital Balance
			Market Transaction Method	Transaction Valuation	$	0.001			Increase
				Discount for Lack of Marketability		50.0	%		Decrease

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Unfunded Commitments: Subject to the terms of a Subscription Agreement between the Fund and Exeter Industrial Value Fund LP, the Fund has made a subscription commitment of $2,000,000 for which it will receive 2,000,000 shares of common stock. As of June 30, 2019, Exeter Industrial Value Fund LP has drawn down approximately $1,860,000, which represents 93.0% of the commitment.

5.  Restricted Securities: The Fund 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 Fund 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 Fund, 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 Fund can 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 the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

7.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund 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.

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

First $2 billion			Over $2 billion
	0.80	%		0.75	%

For the six months ended June 30, 2019, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.79% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares, 0.94% for Class IS shares and 0.94% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2019, approximately $144,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

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

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $113,045,000 and $261,983,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $8,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	—	$	87,212	$	79,152	$	101

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	8,060

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly,

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

no provision for federal income taxes is required in the financial statements.

The Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	53,497	$	50,771	$	23,486	$	69,001

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 in 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 equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(24,324	)	$	24,324

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	4,345	$	7,339

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 18.5%.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Advisers and Administrator 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 considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below 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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were higher than but close to its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

26

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

27

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
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Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc..
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

29

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGRESAN
2668983 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Sustain Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	7
Statements of Changes in Net Assets	8
Financial Highlights	10
Notes to Financial Statements	15
Investment Advisory Agreement Approval	21
Privacy Notice	23
Director and Officer Information	25

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Sustain Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Sustain Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Sustain Portfolio Class I	$	1,000.00	$	1,196.00	$	1,020.38	$	4.85	$	4.46		0.89	%
Global Sustain Portfolio Class A		1,000.00		1,192.90		1,018.65		6.74		6.21		1.24
Global Sustain Portfolio Class L		1,000.00		1,189.90		1,016.17		9.45		8.70		1.74
Global Sustain Portfolio Class C		1,000.00		1,189.40		1,014.93		10.80		9.94		1.99
Global Sustain Portfolio Class IS		1,000.00		1,196.00		1,020.63		4.57		4.21		0.84

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Sustain Portfolio

	Shares		Value (000)
Common Stocks (97.3%)
Canada (2.7%)
Constellation Software, Inc.		672	$	633
France (3.5%)
L'Oreal SA		1,928		549
Sanofi		3,021		261
				810
Germany (9.9%)
Bayer AG (Registered)		3,912		272
Henkel AG & Co., KGaA (Preference)		5,347		523
SAP SE		11,094		1,525
				2,320
Hong Kong (1.8%)
AIA Group Ltd.		39,800		430
United Kingdom (18.7%)
Experian PLC		6,968		212
GlaxoSmithKline PLC		35,818		717
Prudential PLC		17,682		385
Reckitt Benckiser Group PLC		19,111		1,510
RELX PLC		21,521		523
RELX PLC		6,821		165
Unilever PLC		14,116		877
				4,389
United States (60.7%)
Abbott Laboratories		9,167		771
Accenture PLC, Class A		5,834		1,078
Alphabet, Inc., Class A (a)		1,109		1,201
Amphenol Corp., Class A		1,509		145
Automatic Data Processing, Inc.		3,401		562
Baxter International, Inc.		12,364		1,013
Becton Dickinson & Co.		3,048		768
Booking Holdings, Inc. (a)		199		373
Cerner Corp.		5,912		433
Church & Dwight Co., Inc.		2,566		187
Clorox Co. (The)		672		103
Coca-Cola Co. (The)		10,497		535
Danaher Corp.		5,367		767
Factset Research Systems, Inc.		1,012		290
Fidelity National Information Services, Inc.		3,803		467
Fox Corp., Class A (a)		4,484		164
Fox Corp., Class B (a)		4,977		182
IPG Photonics Corp. (a)		1,072		165
Medtronic PLC		8,040		783
Microsoft Corp.		12,242		1,640
Moody's Corp.		930		182
NIKE, Inc., Class B		4,930		414
Visa, Inc., Class A		8,079		1,402
Zoetis, Inc.		5,368		609
				14,234
Total Common Stocks (Cost $19,251)				22,816

	Shares		Value (000)
Short-Term Investment (2.3%)
Investment Company (2.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $531)		530,807	$	531
Total Investments (99.6%) (Cost $19,782) (b)(c)				23,347
Other Assets in Excess of Liabilities (0.4%)				88
Net Assets (100.0%)			$	23,435

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  The approximate fair value and percentage of net assets, $7,949,000 and 33.9%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $3,810,000 and the aggregate gross unrealized depreciation is approximately $245,000, resulting in net unrealized appreciation of approximately $3,565,000.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		22.0	%
Health Care Equipment & Supplies		17.6
Software		16.3
Information Technology Services		15.0
Household Products		9.9
Pharmaceuticals		8.0
Personal Products		6.1
Interactive Media & Services		5.1
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.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Sustain Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $19,251)	$	22,816
Investment in Security of Affiliated Issuer, at Value (Cost $531)		531
Total Investments in Securities, at Value (Cost $19,782)		23,347
Tax Reclaim Receivable		27
Dividends Receivable		24
Receivable for Fund Shares Sold		14
Due from Adviser		11
Receivable from Affiliate		1
Other Assets		72
Total Assets		23,496
Liabilities:
Payable for Professional Fees		50
Payable for Custodian Fees		5
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		2
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Administration Fees		1
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		2
Total Liabilities		61
Net Assets	$	23,435
Net Assets Consist of:
Paid-in-Capital	$	19,412
Total Distributable Earnings		4,023
Net Assets	$	23,435

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Sustain Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	10,530
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		760,387
Net Asset Value, Offering and Redemption Price Per Share	$	13.85
CLASS A:
Net Assets	$	2,088
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		151,378
Net Asset Value, Redemption Price Per Share	$	13.79
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.76
Maximum Offering Price Per Share	$	14.55
CLASS L:
Net Assets	$	1,575
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		115,234
Net Asset Value, Offering and Redemption Price Per Share	$	13.66
CLASS C:
Net Assets	$	2,393
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		178,072
Net Asset Value, Offering and Redemption Price Per Share	$	13.44
CLASS IS:
Net Assets	$	6,849
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		494,665
Net Asset Value, Offering and Redemption Price Per Share	$	13.85

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Sustain Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $11 of Foreign Taxes Withheld)	$	203
Dividends from Security of Affiliated Issuer (Note G)		6
Total Investment Income		209
Expenses:
Advisory Fees (Note B)		68
Professional Fees		49
Registration Fees		26
Shareholder Services Fees — Class A (Note D)		3
Distribution and Shareholder Services Fees — Class L (Note D)		6
Distribution and Shareholder Services Fees — Class C (Note D)		11
Custodian Fees (Note F)		14
Shareholder Reporting Fees		8
Administration Fees (Note C)		8
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Sub Transfer Agency Fees — Class I		1
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		1
Directors' Fees and Expenses		2
Pricing Fees		1
Other Expenses		6
Total Expenses		210
Waiver of Advisory Fees (Note B)		(68	)
Expenses Reimbursed by Adviser (Note B)		(31	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class L (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(1	)
Net Expenses		109
Net Investment Income		100
Realized Gain:
Investments Sold		385
Foreign Currency Translation		—	@
Net Realized Gain		385
Change in Unrealized Appreciation (Depreciation):
Investments		2,875
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		2,875
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		3,260
Net Increase in Net Assets Resulting from Operations	$	3,360

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Sustain Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	100		$	76
Net Realized Gain		385			1,325
Net Change in Unrealized Appreciation (Depreciation)		2,875			(1,352	)
Net Increase in Net Assets Resulting from Operations		3,360			49
Dividends and Distributions to Shareholders:
Class I		—			(465	)
Class A		—			(128	)
Class L		—			(105	)
Class C		—			(136	)
Class IS		—			(337	)
Total Dividends and Distributions to Shareholders		—			(1,171	)
Capital Share Transactions:(1)
Class I:
Subscribed		3,424			4,256
Distributions Reinvested		—			290
Redeemed		(161	)		(3,702	)
Class A:
Subscribed		425			389
Distributions Reinvested		—			118
Redeemed		(570	)		(787	)
Class L:
Distributions Reinvested		—			96
Redeemed		(50	)		(239	)
Class C:
Subscribed		337			755
Distributions Reinvested		—			135
Redeemed		(151	)		(334	)
Class IS:
Subscribed		1,000			5,000
Distributions Reinvested		—			336
Redeemed		(—	@)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		4,254			6,313
Total Increase in Net Assets		7,614			5,191
Net Assets:
Beginning of Period		15,821			10,630
End of Period	$	23,435		$	15,821

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Sustain Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1) Capital Share Transactions:
Class I:
Shares Subscribed		266			346
Shares Issued on Distributions Reinvested		—			24
Shares Redeemed		(14	)		(289	)
Net Increase in Class I Shares Outstanding		252			81
Class A:
Shares Subscribed		35			33
Shares Issued on Distributions Reinvested		—			10
Shares Redeemed		(45	)		(61	)
Net Decrease in Class A Shares Outstanding		(10	)		(18	)
Class L:
Shares Issued on Distributions Reinvested		—			8
Shares Redeemed		(4	)		(19	)
Net Decrease in Class L Shares Outstanding		(4	)		(11	)
Class C:
Shares Subscribed		27			62
Shares Issued on Distributions Reinvested		—			12
Shares Redeemed		(12	)		(27	)
Net Increase in Class C Shares Outstanding		15			47
Class IS:
Shares Subscribed		76			389
Shares Issued on Distributions Reinvested		—			29
Shares Redeemed		(—	@@)		—
Net Increase in Class IS Shares Outstanding		76			418

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Sustain Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	11.58		$	12.47		$	10.81		$	11.43		$	11.34		$	11.28
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.08			0.12			0.13			0.17			0.15			0.17
Net Realized and Unrealized Gain (Loss)		2.19			(0.04	)		2.35			0.29			0.46			0.13
Total from Investment Operations		2.27			0.08			2.48			0.46			0.61			0.30
Distributions from and/or in Excess of:
Net Investment Income		—			(0.07	)		(0.13	)		(0.20	)		(0.18	)		(0.13	)
Net Realized Gain		—			(0.90	)		(0.69	)		(0.88	)		(0.34	)		(0.11	)
Total Distributions		—			(0.97	)		(0.82	)		(1.08	)		(0.52	)		(0.24	)
Net Asset Value, End of Period	$	13.85		$	11.58		$	12.47		$	10.81		$	11.43		$	11.34
Total Return(3)		19.60	%(8)		0.60	%		22.86	%		4.20	%		5.27	%		2.66	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10,530		$	5,891		$	5,334		$	3,993		$	8,531		$	14,579
Ratio of Expenses Before Expense Limitation		1.93	%(9)		2.86	%		3.54	%		2.45	%		2.21	%		2.34	%
Ratio of Expenses After Expense Limitation		0.89	%(4)(9)		0.93	%(4)(6)		1.00	%(4)		0.99	%(4)		0.97	%(4)		1.11	%(4)(5)
Ratio of Net Investment Income		1.28	%(4)(9)		0.97	%(4)		1.10	%(4)		1.46	%(4)		1.26	%(4)		1.49	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		4	%(8)		76	%		39	%		35	%		61	%		31	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective October 1, 2014, 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 October 1, 2014, the maximum ratio was 1.20% for Class I shares.

(6)  Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.90% for Class I shares. Prior to April 30, 2018, the maximum ratio was 1.00% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Sustain Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	11.56		$	12.44		$	10.79		$	11.40		$	11.32		$	11.27
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.07			0.08			0.11			0.11			0.12
Net Realized and Unrealized Gain (Loss)		2.18			(0.03	)		2.35			0.32			0.45			0.14
Total from Investment Operations		2.23			0.04			2.43			0.43			0.56			0.26
Distributions from and/or in Excess of:
Net Investment Income		—			(0.02	)		(0.09	)		(0.16	)		(0.14	)		(0.10	)
Net Realized Gain		—			(0.90	)		(0.69	)		(0.88	)		(0.34	)		(0.11	)
Total Distributions		—			(0.92	)		(0.78	)		(1.04	)		(0.48	)		(0.21	)
Net Asset Value, End of Period	$	13.79		$	11.56		$	12.44		$	10.79		$	11.40		$	11.32
Total Return(3)		19.29	%(8)		0.26	%		22.45	%		3.83	%		4.91	%		2.34	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,088		$	1,872		$	2,243		$	2,182		$	3,246		$	4,331
Ratio of Expenses Before Expense Limitation		2.27	%(9)		3.21	%		3.90	%		2.85	%		2.52	%		2.62	%
Ratio of Expenses After Expense Limitation		1.24	%(4)(9)		1.28	%(4)(6)		1.35	%(4)		1.33	%(4)		1.30	%(4)		1.40	%(4)(5)
Ratio of Net Investment Income		0.83	%(4)(9)		0.57	%(4)		0.66	%(4)		0.98	%(4)		0.98	%(4)		1.03	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		4	%(8)		76	%		39	%		35	%		61	%		31	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective October 1, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratios of 1.35% for Class A shares. Prior to October 1, 2014, the maximum ratio was 1.55% for Class A shares.

(6)  Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class A shares. Prior to April 30, 2018, the maximum ratio was 1.35% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Sustain Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	11.47		$	12.41		$	10.76		$	11.37		$	11.29		$	11.25
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.02			0.01			0.03			0.06			0.05			0.06
Net Realized and Unrealized Gain (Loss)		2.17			(0.04	)		2.32			0.31			0.45			0.14
Total from Investment Operations		2.19			(0.03	)		2.35			0.37			0.50			0.20
Distributions from and/or in Excess of:
Net Investment Income		—			(0.01	)		(0.01	)		(0.10	)		(0.08	)		(0.05	)
Net Realized Gain		—			(0.90	)		(0.69	)		(0.88	)		(0.34	)		(0.11	)
Total Distributions		—			(0.91	)		(0.70	)		(0.98	)		(0.42	)		(0.16	)
Net Asset Value, End of Period	$	13.66		$	11.47		$	12.41		$	10.76		$	11.37		$	11.29
Total Return(3)		18.99	%(8)		(0.25	)%		21.80	%		3.31	%		4.49	%		1.74	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,575		$	1,365		$	1,611		$	2,194		$	2,848		$	2,723
Ratio of Expenses Before Expense Limitation		2.79	%(9)		3.73	%		4.39	%		3.35	%		3.06	%		3.15	%
Ratio of Expenses After Expense Limitation		1.74	%(4)(9)		1.78	%(4)(6)		1.85	%(4)		1.81	%(4)		1.81	%(4)		1.93	%(4)(5)
Ratio of Net Investment Income		0.35	%(4)(9)		0.04	%(4)		0.24	%(4)		0.52	%(4)		0.46	%(4)		0.55	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		4	%(8)		76	%		39	%		35	%		61	%		31	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective October 1, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets net assets to the maximum ratios of 1.85% for Class L shares. Prior to October 1, 2014 the maximum ratio was 2.05% for Class L shares.

(6)  Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.75% for Class L shares. Prior to April 30, 2018, the maximum ratio was 1.85% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Sustain Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	11.30		$	12.26		$	10.67		$	11.30		$	11.77
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		0.01			(0.03	)		(0.01	)		0.02			(0.03	)
Net Realized and Unrealized Gain (Loss)		2.13			(0.02	)		2.30			0.32			0.02
Total from Investment Operations		2.14			(0.05	)		2.29			0.34			(0.01	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.01	)		(0.01	)		(0.09	)		(0.12	)
Net Realized Gain		—			(0.90	)		(0.69	)		(0.88	)		(0.34	)
Total Distributions		—			(0.91	)		(0.70	)		(0.97	)		(0.46	)
Net Asset Value, End of Period	$	13.44		$	11.30		$	12.26		$	10.67		$	11.30
Total Return(4)		18.94	%(8)		(0.50	)%		21.46	%		3.06	%		(0.13	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,393		$	1,846		$	1,430		$	819		$	648
Ratio of Expenses Before Expense Limitation		3.01	%(9)		4.00	%		4.71	%		3.83	%		3.80	%(9)
Ratio of Expenses After Expense Limitation		1.99	%(5)(9)		2.02	%(5)(6)		2.10	%(5)		2.10	%(5)		2.10	%(5)(9)
Ratio of Net Investment Income (Loss)		0.11	%(5)(9)		(0.24	)%(5)		(0.06	)%(5)		0.17	%(5)		(0.39	)%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		4	%(8)		76	%		39	%		35	%		61	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.00% for Class C shares. Prior to April 30, 2018, the maximum ratio was 2.10% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Sustain Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	11.58		$	12.47		$	10.81		$	11.43		$	11.34		$	11.28
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.08			0.05			0.14			0.16			0.16			0.17
Net Realized and Unrealized Gain		2.19			0.04			2.34			0.31			0.45			0.13
Total from Investment Operations		2.27			0.09			2.48			0.47			0.61			0.30
Distributions from and/or in Excess of:
Net Investment Income		—			(0.08	)		(0.13	)		(0.21	)		(0.18	)		(0.13	)
Net Realized Gain		—			(0.90	)		(0.69	)		(0.88	)		(0.34	)		(0.11	)
Total Distributions		—			(0.98	)		(0.82	)		(1.09	)		(0.52	)		(0.24	)
Net Asset Value, End of Period	$	13.85		$	11.58		$	12.47		$	10.81		$	11.43		$	11.34
Total Return(3)		19.60	%(8)		0.66	%		22.91	%		4.17	%		5.38	%		2.67	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	6,849		$	4,847		$	12		$	11		$	11		$	11
Ratio of Expenses Before Expense Limitation		1.90	%(9)		3.12	%		19.10	%		19.36	%		16.35	%		19.72	%
Ratio of Expenses After Expense Limitation		0.84	%(4)(9)		0.85	%(4)(6)		0.95	%(4)		0.95	%(4)		0.95	%(4)		1.10	%(4)(5)
Ratio of Net Investment Income		1.31	%(4)(9)		0.41	%(4)		1.15	%(4)		1.35	%(4)		1.31	%(4)		1.51	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		4	%(8)		76	%		39	%		35	%		61	%		31	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective October 1, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.95% for Class IS shares. Prior to October 1, 2014, the maximum ratio was 1.15% for Class IS shares.

(6)  Effective April 30, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.85% for Class IS shares. Prior to April 30, 2018, the maximum ratio was 0.95% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Sustain Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if

there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, determines that the closing price, last sale price or the mean between

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	535	$	—	$	—	$	535
Capital Markets		472		—		—		472
Electronic Equipment, Instruments & Components		310		—		—		310
Health Care Equipment & Supplies		4,102		—		—		4,102
Health Care Technology		433		—		—		433
Household Products		290		2,033		—		2,323
Information Technology Services		3,509		—		—		3,509
Insurance		—		815		—		815
Interactive Media & Services		1,201		—		—		1,201
Internet & Direct Marketing Retail		373		—		—		373
Media		346		—		—		346
Personal Products		—		1,426		—		1,426
Pharmaceuticals		609		1,250		—		1,859
Professional Services		—		900		—		900
Software		2,273		1,525		—		3,798
Textiles, Apparel & Luxury Goods		414		—		—		414
Total Common Stocks		14,867		7,949		—		22,816
Short-Term Investment
Investment Company		531		—		—		531
Total Assets	$	15,398	$	7,949	$	—	$	23,347

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the

foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

for investment. The "local" and "foreign shares" market values may differ. In the absence of trading of the foreign shares in such markets, the Fund values the foreign shares at the closing exchange price of the local shares.

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

5.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $500 million			Over $500 million
	0.70	%		0.65	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% for Class I shares, 1.25% for Class A shares, 1.75% for Class L shares, 2.00% for Class C shares and 0.85% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $68,000 of advisory fees were waived and approximately $32,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

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

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $6,040,000 and $699,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $1,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	606	$	5,001	$	5,076	$	6

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	531

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	66	$	1,105	$	91	$	539

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 equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(199	)	$	199

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	14	$	90

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 48.1%.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator 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 considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund'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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

22

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

23

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

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

Sub-Adviser

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

Distributor

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

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

25

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGQSAN
2668850 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Growth Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	17
Investment Advisory Agreement Approval	28
Privacy Notice	30
Director and Officer Information	32

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Growth Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Growth Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		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	$	1,281.20	$	1,022.02	$	3.17	$	2.81		0.56	%
Growth Portfolio Class A		1,000.00		1,279.40		1,020.73		4.63		4.11		0.82
Growth Portfolio Class L		1,000.00		1,276.40		1,018.30		7.39		6.56		1.31
Growth Portfolio Class C		1,000.00		1,275.00		1,017.11		8.74		7.75		1.55
Growth Portfolio Class IS		1,000.00		1,281.60		1,022.36		2.77		2.46		0.49
Growth Portfolio Class IR		1,000.00		1,281.60		1,022.36		2.77		2.46		0.49

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Growth Portfolio

	Shares		Value (000)
Common Stocks (95.3%)
Biotechnology (0.7%)
Alnylam Pharmaceuticals, Inc. (a)		406,022	$	29,461
Moderna, Inc. (a)(b)		1,298,888		19,016
				48,477
Chemicals (2.8%)
Ecolab, Inc.		1,074,750		212,199
Entertainment (10.6%)
Netflix, Inc. (a)		534,165		196,210
Spotify Technology SA (a)		2,360,746		345,188
Walt Disney Co. (The)		1,850,901		258,460
				799,858
Health Care Equipment & Supplies (6.8%)
DexCom, Inc. (a)		904,771		135,571
Intuitive Surgical, Inc. (a)		709,802		372,326
				507,897
Health Care Providers & Services (3.0%)
Covetrus, Inc. (a)		3,882,112		94,956
Guardant Health, Inc. (a)		1,510,691		130,418
				225,374
Health Care Technology (4.9%)
Agilon Health Topco, Inc. (a)(c)(d)(e) (acquisition cost — $25,030; acquired 11/7/18)		66,188		25,650
Veeva Systems, Inc., Class A (a)		2,136,690		346,379
				372,029
Household Durables (1.4%)
Roku, Inc. (a)		1,164,325		105,465
Information Technology Services (17.3%)
Adyen N.V. (Netherlands) (a)		146,778		113,338
MongoDB, Inc. (a)		1,703,925		259,150
Okta, Inc. (a)		911,214		112,544
Shopify, Inc., Class A (Canada) (a)		1,154,615		346,558
Square, Inc., Class A (a)		1,601,066		116,125
Twilio, Inc., Class A (a)		2,617,627		356,914
				1,304,629
Interactive Media & Services (8.1%)
Alphabet, Inc., Class C (a)		166,052		179,487
Facebook, Inc., Class A (a)		570,439		110,095
Twitter, Inc. (a)		9,105,568		317,784
				607,366
Internet & Direct Marketing Retail (13.4%)
Amazon.com, Inc. (a)		303,304		574,346
Chewy, Inc., Class A (a)(b)		1,688,988		59,115
Farfetch Ltd., Class A (a)		4,251,506		88,431
MercadoLibre, Inc. (a)		290,577		177,766
Wayfair, Inc., Class A (a)		761,229		111,139
				1,010,797
Life Sciences Tools & Services (5.3%)
Illumina, Inc. (a)		1,092,911		402,355

	Shares		Value (000)
Road & Rail (3.6%)
Uber Technologies, Inc. (a)		4,867,640	$	225,761
Uber Technologies, Inc. (acquisition cost — $54,173; acquired 12/3/15) (a)(f)		1,110,729		48,511
				274,272
Semiconductors & Semiconductor Equipment (1.4%)
NVIDIA Corp.		646,058		106,102
Software (16.0%)
Atlassian Corp., PLC, Class A (United Kingdom) (a)		855,413		111,922
Coupa Software, Inc. (a)		1,549,453		196,176
ServiceNow, Inc. (a)		950,514		260,983
Slack Technologies, Inc., Class A (a)(b)		6,917,956		259,423
Trade Desk, Inc. (The), Class A (a)		526,276		119,875
Workday, Inc., Class A (a)		1,250,344		257,046
				1,205,425
Total Common Stocks (Cost $4,856,736)				7,182,245
Preferred Stocks (1.2%)
Electronic Equipment, Instruments & Components (0.3%)
Magic Leap Series C (a)(c)(d)(e) (acquisition cost — $18,812; acquired 12/22/15)		816,725		22,052
Internet & Direct Marketing Retail (0.9%)
Airbnb, Inc. Series D (a)(c)(d)(e) (acquisition cost — $20,638; acquired 4/16/14)		506,928		64,851
Total Preferred Stocks (Cost $39,450)				86,903
Short-Term Investments (6.1%)
Securities held as Collateral on Loaned Securities (0.6%)
Investment Company (0.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		36,126,101		36,126
	Face Amount (000)
Repurchase Agreements (0.1%)
Barclays Capital, Inc., (2.50%, dated 6/28/19, due 7/1/19; proceeds $1,674; fully collateralized by a U.S. Government obligation; 3.63% due 2/15/44; valued at $1,707)	$	1,674		1,674
Merrill Lynch & Co., Inc., (2.48%, dated 6/28/19, due 7/1/19; proceeds $9,370; fully collateralized by U.S. Government obligations; 2.13% - 2.50 due 2/15/41 - 5/15/46; valued at $9,556)		9,368		9,368
				11,042
Total Securities held as Collateral on Loaned Securities (Cost $47,168)				47,168

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Growth Portfolio

	Shares		Value (000)
Investment Company (5.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $414,026)		414,025,956	$	414,026
Total Short-Term Investments (Cost $461,194)				461,194
Total Investments Excluding Purchased Options (102.6%) (Cost $5,357,380)				7,730,342
Total Purchased Options Outstanding (0.1%) (Cost $24,921)				7,886
Total Investments (102.7%) (Cost $5,382,301) Including $47,257 of Securities Loaned (g)(h)				7,738,228
Liabilities in Excess of Other Assets (–2.7%)				(202,071	)
Net Assets (100.0%)			$	7,536,157

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2019.

(c)  At June 30, 2019, the Fund held fair valued securities valued at approximately $112,553,000, representing 1.5% 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 Company's (as defined herein) Directors.

(d)  Security has been deemed illiquid at June 30, 2019.

(e)  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 Fund 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, 2019 amounts to approximately $112,553,000 and represents 1.5% of net assets.

(f)  Security has been deemed by the investment manager to be illiquid and is subject to restrictions on resale. At June 30, 2019, this security amounted to $48,511,000, which represents 0.6% of net assets of the Fund.

(g)  The approximate fair value and percentage of net assets, $113,338,000 and 1.5%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(h)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $2,469,732,000 and the aggregate gross unrealized depreciation is approximately $113,805,000, resulting in net unrealized appreciation of approximately $2,355,927,000.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2019:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.58	Jan-20		1,126,276,241		1,126,276	$	2,598	$	5,765	$	(3,167	)
Royal Bank of Scotland	USD/CNH	CNH	7.78	Jul-19		1,184,205,924		1,184,206		1		5,770		(5,769	)
Royal Bank of Scotland	USD/CNH	CNH	7.85	Jun-20		1,458,816,594		1,458,817		4,762		7,528		(2,766	)
Royal Bank of Scotland	USD/CNH	CNH	8.00	Oct-19		996,202,179		996,202		525		5,858		(5,333	)
									$	7,886	$	24,921	$	(17,035	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		17.8	%
Information Technology Services		17.0
Software		15.7
Internet & Direct Marketing Retail		14.0
Entertainment		10.4
Interactive Media & Services		7.9
Health Care Equipment & Supplies		6.6
Short-Term Investments		5.4
Life Sciences Tools & Services		5.2
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2019.

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

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Growth Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $4,932,149)	$	7,288,076
Investment in Security of Affiliated Issuer, at Value (Cost $450,152)		450,152
Total Investments in Securities, at Value (Cost $5,382,301)		7,738,228
Foreign Currency, at Value (Cost $1)		1
Cash from Securities Lending		272
Receivable for Investments Sold		115,429
Receivable for Fund Shares Sold		12,065
Receivable from Affiliate		750
Dividends Receivable		533
Receivable from Securities Lending Income		283
Other Assets		478
Total Assets		7,868,039
Liabilities:
Payable for Investments Purchased		263,857
Collateral on Securities Loaned, at Value		47,440
Due to Broker		7,820
Payable for Advisory Fees		6,761
Payable for Fund Shares Redeemed		4,042
Payable for Shareholder Services Fees — Class A		545
Payable for Distribution and Shareholder Services Fees — Class L		63
Payable for Distribution and Shareholder Services Fees — Class C		132
Payable for Administration Fees		488
Payable for Sub Transfer Agency Fees — Class I		61
Payable for Sub Transfer Agency Fees — Class A		260
Payable for Sub Transfer Agency Fees — Class L		9
Payable for Transfer Agency Fees — Class I		22
Payable for Transfer Agency Fees — Class A		72
Payable for Transfer Agency Fees — Class L		6
Payable for Transfer Agency Fees — Class C		1
Payable for Transfer Agency Fees — Class IS		1
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Directors' Fees and Expenses		44
Payable for Professional Fees		39
Payable for Custodian Fees		18
Other Liabilities		201
Total Liabilities		331,882
Net Assets	$	7,536,157
Net Assets Consist of:
Paid-in-Capital	$	4,643,223
Total Distributable Earnings		2,892,934
Net Assets	$	7,536,157

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Growth Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	2,770,461
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		51,768,268
Net Asset Value, Offering and Redemption Price Per Share	$	53.52
CLASS A:
Net Assets	$	2,692,301
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		53,087,886
Net Asset Value, Redemption Price Per Share	$	50.71
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	2.81
Maximum Offering Price Per Share	$	53.52
CLASS L:
Net Assets	$	103,180
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,153,715
Net Asset Value, Offering and Redemption Price Per Share	$	47.91
CLASS C:
Net Assets	$	166,524
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,512,452
Net Asset Value, Offering and Redemption Price Per Share	$	47.41
CLASS IS:
Net Assets	$	1,622,759
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		30,104,446
Net Asset Value, Offering and Redemption Price Per Share	$	53.90
CLASS IR:
Net Assets	$	180,932
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,356,619
Net Asset Value, Offering and Redemption Price Per Share	$	53.90
(1) Including: Securities on Loan, at Value:	$	47,257

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Growth Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Security of Affiliated Issuer (Note G)	$	3,271
Income from Securities Loaned — Net		2,025
Dividends from Securities of Unaffiliated Issuers		159
Total Investment Income		5,455
Expenses:
Advisory Fees (Note B)		13,098
Shareholder Services Fees — Class A (Note D)		3,060
Distribution and Shareholder Services Fees — Class L (Note D)		362
Distribution and Shareholder Services Fees — Class C (Note D)		655
Administration Fees (Note C)		2,654
Sub Transfer Agency Fees — Class I		837
Sub Transfer Agency Fees — Class A		961
Sub Transfer Agency Fees — Class L		29
Sub Transfer Agency Fees — Class C		39
Shareholder Reporting Fees		168
Transfer Agency Fees — Class I (Note E)		36
Transfer Agency Fees — Class A (Note E)		104
Transfer Agency Fees — Class L (Note E)		9
Transfer Agency Fees — Class C (Note E)		6
Transfer Agency Fees — Class IS (Note E)		3
Transfer Agency Fees — Class IR (Note E)		1
Registration Fees		119
Directors' Fees and Expenses		92
Professional Fees		67
Custodian Fees (Note F)		64
Pricing Fees		2
Other Expenses		74
Expenses Before Non Operating Expenses		22,440
Bank Overdraft Expense		1
Total Expenses		22,441
Rebate from Morgan Stanley Affiliate (Note G)		(282	)
Net Expenses		22,159
Net Investment Loss		(16,704	)
Realized Gain (Loss):
Investments Sold		567,348
Foreign Currency Translation		(24	)
Net Realized Gain		567,324
Change in Unrealized Appreciation (Depreciation):
Investments		1,015,716
Foreign Currency Translation		(11	)
Net Change in Unrealized Appreciation (Depreciation)		1,015,705
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		1,583,029
Net Increase in Net Assets Resulting from Operations	$	1,566,325

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Growth Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Loss	$	(16,704	)	$	(15,450	)
Net Realized Gain		567,324			297,650
Net Change in Unrealized Appreciation (Depreciation)		1,015,705			(58,520	)
Net Increase in Net Assets Resulting from Operations		1,566,325			223,680
Dividends and Distributions to Shareholders:
Class I		—			(128,911	)
Class A		—			(164,975	)
Class L		—			(7,134	)
Class C		—			(6,987	)
Class IS		—			(91,589	)
Class IR		—			(8,886	)
Total Dividends and Distributions to Shareholders		—			(408,482	)
Capital Share Transactions:(1)
Class I:
Subscribed		750,111			1,385,099
Distributions Reinvested		—			117,991
Redeemed		(310,062	)		(608,627	)
Class A:
Subscribed		326,566			640,192
Distributions Reinvested		—			160,500
Redeemed		(258,827	)		(546,860	)
Class L:
Exchanged		—			315
Distributions Reinvested		—			7,014
Redeemed		(3,575	)		(13,831	)
Class C:
Subscribed		55,716			76,038
Distributions Reinvested		—			6,370
Redeemed		(10,552	)		(17,708	)
Class IS:
Subscribed		171,025			229,920
Distributions Reinvested		—			90,879
Redeemed		(98,655	)		(241,666	)
Class IR:
Subscribed		—			169,937	(a)
Distributions Reinvested		—			8,885	(a)
Redeemed		(10,000	)		—
Net Increase in Net Assets Resulting from Capital Share Transactions		611,747			1,464,448
Total Increase in Net Assets		2,178,072			1,279,646
Net Assets:
Beginning of Period		5,358,085			4,078,439
End of Period	$	7,536,157		$	5,358,085

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Growth Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		15,260			29,271
Shares Issued on Distributions Reinvested		—			2,601
Shares Redeemed		(6,268	)		(12,899	)
Net Increase in Class I Shares Outstanding		8,992			18,973
Class A:
Shares Subscribed		7,005			14,015
Shares Issued on Distributions Reinvested		—			3,714
Shares Redeemed		(5,506	)		(12,098	)
Net Increase in Class A Shares Outstanding		1,499			5,631
Class L:
Shares Exchanged		—			9
Shares Issued on Distributions Reinvested		—			171
Shares Redeemed		(81	)		(319	)
Net Decrease in Class L Shares Outstanding		(81	)		(139	)
Class C:
Shares Subscribed		1,267			1,767
Shares Issued on Distributions Reinvested		—			158
Shares Redeemed		(241	)		(432	)
Net Increase in Class C Shares Outstanding		1,026			1,493
Class IS:
Shares Subscribed		3,494			4,734
Shares Issued on Distributions Reinvested		—			1,984
Shares Redeemed		(1,999	)		(5,123	)
Net Increase in Class IS Shares Outstanding		1,495			1,595
Class IR:
Shares Subscribed		—			3,360	(a)
Shares Issued on Distributions Reinvested		—			198	(a)
Shares Redeemed		(202	)		—
Net Increase (Decrease) in Class IR Shares Outstanding		(202	)		3,558

(a)  For the period June 15, 2018 through December 31, 2018.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Growth Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	41.75		$	41.65		$	35.19		$	40.44		$	38.86		$	38.38
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.10	)		(0.08	)		(0.11	)		0.01			(0.07	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		11.87			3.50			15.39			(0.79	)		4.70			2.43
Total from Investment Operations		11.77			3.42			15.28			(0.78	)		4.63			2.40
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.00	)(3)
Net Realized Gain		—			(3.32	)		(8.82	)		(4.47	)		(3.05	)		(1.92	)
Total Distributions		—			(3.32	)		(8.82	)		(4.47	)		(3.05	)		(1.92	)
Net Asset Value, End of Period	$	53.52		$	41.75		$	41.65		$	35.19		$	40.44		$	38.86
Total Return(4)		28.12	%(9)		7.66	%		43.83	%		(1.91	)%		11.91	%		6.42	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,770,461		$	1,785,893		$	991,362		$	726,787		$	876,660		$	794,648
Ratio of Expenses Before Expense Limitation		0.57	%(10)		N/A			N/A			0.63	%		N/A			N/A
Ratio of Expenses After Expense Limitation		0.56	%(5)(10)		0.58	%(5)		0.61	%(5)		0.63	%(5)(7)		0.61	%(5)		0.69	%(5)(6)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.56	%(5)(10)		N/A			0.61	%(5)		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.39	)%(5)(10)		(0.17	)%(5)		(0.25	)%(5)		0.02	%(5)		(0.18	)%(5)		(0.08	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(10)		0.01	%		0.01	%		0.00	%(8)		0.00	%(8)		0.01	%
Portfolio Turnover Rate		56	%(9)		41	%		55	%		39	%		34	%		44	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective April 7, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.70% for Class I shares. Prior to April 7, 2014, the maximum ratio was 0.80% for Class I shares.

(7)  Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.80% for Class I shares. Prior to April 7, 2016, the maximum ratio was 0.70% for Class I shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Growth Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	39.61		$	39.77		$	33.97		$	39.31		$	37.98		$	37.61
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.15	)		(0.19	)		(0.22	)		(0.10	)		(0.21	)		(0.13	)
Net Realized and Unrealized Gain (Loss)		11.25			3.35			14.84			(0.77	)		4.59			2.42
Total from Investment Operations		11.10			3.16			14.62			(0.87	)		4.38			2.29
Distributions from and/or in Excess of:
Net Realized Gain		—			(3.32	)		(8.82	)		(4.47	)		(3.05	)		(1.92	)
Net Asset Value, End of Period	$	50.71		$	39.61		$	39.77		$	33.97		$	39.31		$	37.98
Total Return(3)		27.94	%(8)		7.39	%		43.45	%		(2.21	)%		11.53	%		6.25	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,692,301		$	2,043,706		$	1,827,833		$	1,376,836		$	1,630,538		$	1,549,756
Ratio of Expenses Before Expense Limitation		0.83	%(9)		N/A			N/A			0.92			0.96	%		N/A
Ratio of Expenses After Expense Limitation		0.82	%(4)(9)		0.84	%(4)		0.88	%(4)		0.92	%(4)(6)		0.96	%(4)		0.83	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.82	%(4)(9)		N/A			0.88	%(4)		N/A			N/A			N/A
Ratio of Net Investment Loss		(0.66	)%(4)(9)		(0.43	)%(4)		(0.52	)%(4)		(0.26	)%(4)		(0.52	)%(4)		(0.34	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		56	%(8)		41	%		55	%		39	%		34	%		44	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been 0.005% higher and the Ratio of Net Investment Loss would have been 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Effective April 7, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.05% for Class A shares. Prior to April 7, 2014, the maximum ratio was 1.15% for Class A shares. Prior to September 16, 2013, the maximum ratio was 1.05% for Class A shares.

(6)  Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.15% for Class A shares. Prior to April 7, 2016, the maximum ratio was 1.05% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Growth Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	37.51		$	37.99		$	32.90		$	38.41		$	37.40		$	37.26
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.25	)		(0.39	)		(0.43	)		(0.29	)		(0.44	)		(0.31	)
Net Realized and Unrealized Gain (Loss)		10.65			3.23			14.34			(0.75	)		4.50			2.38
Total from Investment Operations		10.40			2.84			13.91			(1.04	)		4.06			2.07
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.01	)
Net Realized Gain		—			(3.32	)		(8.82	)		(4.47	)		(3.05	)		(1.92	)
Total Distributions		—			(3.32	)		(8.82	)		(4.47	)		(3.05	)		(1.93	)
Net Asset Value, End of Period	$	47.91		$	37.51		$	37.99		$	32.90		$	38.41		$	37.40
Total Return(3)		27.64	%(8)		6.89	%		42.69	%		(2.72	)%		10.85	%		5.72	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	103,180		$	83,818		$	90,177		$	74,324		$	89,277		$	89,854
Ratio of Expenses Before Expense Limitation		1.32	%(9)		N/A			N/A			1.45	%		1.57	%		N/A
Ratio of Expenses After Expense Limitation		1.31	%(4)(9)		1.31	%(4)		1.42	%(4)		1.45	%(4)(6)		1.55	%(4)		1.29	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.31	%(4)(9)		N/A			1.42	%(4)		N/A			N/A			N/A
Ratio of Net Investment Loss		(1.15	)%(4)(9)		(0.90	)%(4)		(1.05	)%(4)		(0.79	)%(4)		(1.11	)%(4)		(0.82	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		56	%(8)		41	%		55	%		39	%		34	%		44	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Loss would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Effective April 7, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.55% for Class L shares. Prior to April 7, 2014, the maximum ratio was 1.65% for Class L shares.

(6)  Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.65% for Class L shares. Prior to April 7, 2016, the maximum ratio was 1.55% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Growth Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	37.17		$	37.76		$	32.81		$	38.40		$	40.33
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.30	)		(0.51	)		(0.51	)		(0.38	)		(0.35	)
Net Realized and Unrealized Gain (Loss)		10.54			3.24			14.28			(0.74	)		1.47
Total from Investment Operations		10.24			2.73			13.77			(1.12	)		1.12
Distributions from and/or in Excess of:
Net Realized Gain		—			(3.32	)		(8.82	)		(4.47	)		(3.05	)
Net Asset Value, End of Period	$	47.41		$	37.17		$	37.76		$	32.81		$	38.40
Total Return(4)		27.50	%(8)		6.61	%		42.37	%		(2.93	)%		2.71	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	166,524		$	92,431		$	37,524		$	16,613		$	13,544
Ratio of Expenses Before Expense Limitation		1.56	%(9)		N/A			N/A			1.70	%		N/A
Ratio of Expenses After Expense Limitation		1.55	%(5)(9)		1.57	%(5)		1.63	%(5)		1.70	%(5)(6)		1.62	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.55	%(5)(9)		N/A			1.63	%		N/A			N/A
Ratio of Net Investment Loss		(1.39	)%(5)(9)		(1.17	)%(5)		(1.26	)%(5)		(1.04	)%(5)		(1.29	)%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		56	%(8)		41	%		55	%		39	%		34	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Loss would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.90% for Class C shares. Prior to April 7, 2016, the maximum ratio was 1.80% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Growth Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	42.04		$	41.89		$	35.32		$	40.54		$	38.92		$	38.40
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.08	)		(0.04	)		(0.07	)		0.05			(0.04	)		(0.05	)
Net Realized and Unrealized Gain (Loss)		11.94			3.51			15.46			(0.80	)		4.71			2.50
Total from Investment Operations		11.86			3.47			15.39			(0.75	)		4.67			2.45
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			—			(0.01	)
Net Realized Gain		—			(3.32	)		(8.82	)		(4.47	)		(3.05	)		(1.92	)
Total Distributions		—			(3.32	)		(8.82	)		(4.47	)		(3.05	)		(1.93	)
Net Asset Value, End of Period	$	53.90		$	42.04		$	41.89		$	35.32		$	40.54		$	38.92
Total Return(3)		28.16	%(8)		7.74	%		43.98	%		(1.83	)%		11.97	%		6.60	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,622,759		$	1,202,659		$	1,131,543		$	875,021		$	1,019,889		$	964,465
Ratio of Expenses Before Expense Limitation		0.49	%(9)		N/A			N/A			0.54	%		N/A			0.55	%
Ratio of Expenses After Expense Limitation		0.49	%(4)(9)		0.50	%(4)		0.53	%(4)		0.54	%(4)(6)		0.54	%(4)		0.54	%(4)(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.49	%(4)(9)		N/A			0.53	%(4)		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		(0.32	)%(4)(9)		(0.09	)%(4)		(0.16	)%(4)		0.12	%(4)		(0.10	)%(4)		(0.12	)%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)		0.01	%
Portfolio Turnover Rate		56	%(8)		41	%		55	%		39	%		34	%		44	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(5)  Effective April 7, 2014, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.67% for Class IS shares. Prior to April 7, 2014, the maximum ratio was 0.73% for Class IS shares.

(6)  Effective April 7, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.73% for Class IS shares. Prior to April 7, 2016, the maximum ratio was 0.67% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Growth Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	42.04		$	52.16
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.08	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		11.94			(6.76	)
Total from Investment Operations		11.86			(6.80	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(3.32	)
Net Asset Value, End of Period	$	53.90		$	42.04
Total Return(3)		28.16	%(6)		(13.48	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	180,932		$	149,578
Ratio of Expenses Before Expense Limitation		0.49	%(7)		N/A
Ratio of Expenses After Expense Limitation		0.49	%(4)(7)		0.49	%(4)(7)
Ratios of Expenses After Expense Limitation Excluding Non Operating Expenses		0.49	%(4)(7)		N/A%
Ratio of Net Investment Loss		(0.34	)%(4)(7)		(0.14	)%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%(7)
Portfolio Turnover Rate		56	%(6)		41	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Growth Portfolio. The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of large capitalization companies.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) 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 its

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) 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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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
Biotechnology	$	48,477	$	—	$	—	$	48,477
Chemicals		212,199		—		—		212,199
Entertainment		799,858		—		—		799,858
Health Care Equipment & Supplies		507,897		—		—		507,897
Health Care Providers & Services		225,374		—		—		225,374
Health Care Technology		346,379		—		25,650		372,029
Household Durables		105,465		—		—		105,465
Information Technology Services		1,191,291		113,338		—		1,304,629
Interactive Media & Services		607,366		—		—		607,366
Internet & Direct Marketing Retail		1,010,797		—		—		1,010,797
Life Sciences Tools & Services		402,355		—		—		402,355
Road & Rail		225,761		48,511		—		274,272
Semiconductors & Semiconductor Equipment		106,102		—		—		106,102
Software		1,205,425		—		—		1,205,425
Total Common Stocks		6,994,746		161,849		25,650		7,182,245
Preferred Stocks
Electronic Equipment, Instruments & Components		—		—		22,052		22,052
Internet & Direct Marketing Retail		—		—		64,851		64,851
Total Preferred Stocks		—		—		86,903		86,903
Call Options Purchased		—		7,886		—		7,886
Short-Term Investments
Investment Company		450,152		—		—		450,152
Repurchase Agreements		—		11,042		—		11,042
Total Short-Term Investments		450,152		11,042		—		461,194
Total Assets	$	7,444,898	$	180,777	$	112,553	$	7,738,228

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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)
Beginning Balance	$	25,069	$	134,501
Purchases		—		—
Sales		—		—
Amortization of discount		—		—
Transfers in		—		—
Transfers out		—		—
Corporate actions		—		(48,511	)
Change in unrealized appreciation (depreciation)		581		913
Realized gains (losses)		—
Ending Balance	$	25,650	$	86,903
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2019	$	581	$	913

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (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, 2019. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance. The Fund calculated the weighted averages of the unobservable inputs relative to each investment's fair value as of June 30, 2019.

	Fair Value at June 30, 2019 (000)		Valuation Technique	Unobservable Input	Amount*			Impact to Valuation from an Increase in Input**
Common Stock	$	25,650	Market Transaction Method	Precedent Transaction	$	378.16		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		15.0	%	Decrease
				Perpetual Growth Rate		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/Revenue		0.8	x	Increase
				Discount for Lack of Marketability		10.0	%	Decrease
Preferred Stocks	$	86,903	Market Transaction Method	Precedent Transaction	$	27.00		Increase
			Discounted Cash Flow	Weighted Average Cost of Capital		14.5	%	Decrease
				Perpetual Growth Rate		3.5	%	Increase
			Market Comparable Companies	Enterprise Value/Revenue		6.6	x	Increase
				Discount for Lack of Marketability		10.0	%	Decrease

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of

default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund 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 in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund 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 Fund 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" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	7,886	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(4,366	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(4,258	)(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	7,886	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) 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 Fund 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

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

termination. Under an ISDA Master Agreement, the Fund 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 potential 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 Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	2,598		$	—	$	(2,598	)	$	0
Royal Bank of Scotland		5,288			—		(5,220	)		68
Total	$	7,886	(a)	$	—	$	(7,818	)	$	68

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) 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, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	3,550,000

6.  Securities Lending: The Fund 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 Fund. The Fund 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 Fund'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 Fund has the right under the securities 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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	47,257	(f)	$	—	$	(47,257	)(g)(h)	$	0

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

(g) The Fund received cash collateral of approximately $47,440,000, of which approximately $47,168,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2019, there was uninvested cash of approximately $272,000, which is not reflected in the Portfolio of Investments.

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

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2019:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	47,440	$	—	$	—	$	—	$	47,440
Total Borrowings	$	47,440	$	—	$	—	$	—	$	47,440
Gross amount of recognized liabilities for securities lending transactions									$	47,440

7.  Restricted Securities: The Fund 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 Fund 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 Fund, 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 Fund can 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 the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

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

9.  Dividends and Distributions to Shareholders: Dividends 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.

10.  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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the 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, 2019, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.38% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund 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, 1.15% for Class A shares, 1.65% for Class L shares, 1.90% for Class C shares, 0.73% for Class IS shares and 0.73% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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. This arrangement had no effect for the six months ended June 30, 2019.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for

providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $3,811,830,000 and $3,554,134,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $282,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	61,442	$	1,851,247	$	1,462,537	$	3,271

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	450,152

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund 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, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	21,258	$	387,224	$	95,691	$	661,617

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 in 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 equalization debits and a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(83,958	)	$	83,958

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	4,144	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 43.1%.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund'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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

29

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

30

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

31

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

32

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGRWSAN
2668960 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Advantage Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	16
Investment Advisory Agreement Approval	25
Privacy Notice	27
Director and Officer Information	29

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in International Advantage Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

International Advantage Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Advantage Portfolio Class I	$	1,000.00	$	1,208.40	$	1,019.93	$	5.37	$	4.91		0.98	%
International Advantage Portfolio Class A		1,000.00		1,206.30		1,018.45		7.00		6.41		1.28
International Advantage Portfolio Class L		1,000.00		1,202.90		1,015.72		10.00		9.15		1.83
International Advantage Portfolio Class C		1,000.00		1,201.70		1,014.83		10.97		10.04		2.01
International Advantage Portfolio Class IS		1,000.00		1,208.30		1,020.18		5.09		4.66		0.93

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

International Advantage Portfolio

	Shares		Value (000)
Common Stocks (90.6%)
Australia (2.8%)
Brookfield Infrastructure Partners LP		1,049,532	$	45,067
Canada (4.5%)
Brookfield Asset Management, Inc., Class A		727,874		34,778
Constellation Software, Inc.		38,731		36,504
				71,282
China (6.1%)
Foshan Haitian Flavouring & Food Co., Ltd., Class A		3,042,776		46,499
TAL Education Group ADR (a)		1,362,651		51,917
				98,416
Denmark (9.4%)
Chr Hansen Holding A/S		480,541		45,185
DSV A/S		1,073,116		105,358
				150,543
France (9.4%)
Danone SA		256,433		21,748
Hermes International		120,501		86,910
Pernod Ricard SA		148,730		27,408
Remy Cointreau SA		100,483		14,501
				150,567
Germany (1.0%)
Rational AG		22,275		15,336
Hong Kong (5.4%)
AIA Group Ltd.		4,230,100		45,730
Haidilao International Holding Ltd. (b)(c)		3,787,000		15,846
Hong Kong Exchanges & Clearing Ltd.		689,800		24,382
				85,958
India (5.5%)
HDFC Bank Ltd.		1,797,539		63,825
Kotak Mahindra Bank Ltd.		1,119,290		23,995
				87,820
Italy (6.9%)
Brunello Cucinelli SpA		372,861		12,575
Moncler SpA		2,281,825		97,560
				110,135
Japan (10.3%)
Calbee, Inc.		1,184,800		31,928
Keyence Corp.		128,500		78,968
Pigeon Corp.		1,334,300		53,824
				164,720
Netherlands (2.9%)
ASML Holding N.V.		222,079		46,429
Sweden (2.5%)
Vitrolife AB		2,066,416		40,301

	Shares		Value (000)
Switzerland (5.1%)
Chocoladefabriken Lindt & Spruengli AG (Registered)		644	$	52,399
Kuehne & Nagel International AG (Registered)		195,319		28,995
				81,394
Taiwan (1.4%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		582,702		22,824
United Kingdom (9.0%)
Diageo PLC		511,127		22,011
Fevertree Drinks PLC		869,054		25,675
Reckitt Benckiser Group PLC		487,704		38,542
Rightmove PLC		8,533,777		57,985
				144,213
United States (8.4%)
Booking Holdings, Inc. (a)		29,630		55,548
EPAM Systems, Inc. (a)		456,950		79,098
				134,646
Total Common Stocks (Cost $1,280,553)				1,449,651
Short-Term Investment (9.7%)
Investment Company (9.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $155,915)		155,915,261		155,915
Total Investments Excluding Purchased Options (100.3%) (Cost $1,436,468)				1,605,566
Total Purchased Options Outstanding (0.1%) (Cost $3,411)				1,391
Total Investments (100.4%) (Cost $1,439,879) Including $6,276 of Securities Loaned (d)(e)				1,606,957
Liabilities in Excess of Other Assets (–0.4%)				(5,809	)
Net Assets (100.0%)			$	1,601,148

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

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

(c)  All or a portion of this security was on loan at June 30, 2019.

(d)  The approximate fair value and percentage of net assets, $1,060,090,000 and 66.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $184,984,000 and the aggregate gross unrealized depreciation is approximately $17,906,000 resulting in net unrealized appreciation of approximately $167,078,000.

ADR  American Depositary Receipt.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

International Advantage Portfolio

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2019:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.58	Jan-20		161,527,226		161,527	$	373		$	827	$	(454	)
Royal Bank of Scotland	USD/CNH	CNH	7.78	Jul-19		95,067,431		95,067		—	@		463		(463	)
Royal Bank of Scotland	USD/CNH	CNH	7.85	Jun-20		295,471,355		295,471		965			1,525		(560	)
Royal Bank of Scotland	USD/CNH	CNH	8.00	Oct-19		101,329,227		101,329		53			596		(543	)
									$	1,391		$	3,411	$	(2,020	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		45.1	%
Textiles, Apparel & Luxury Goods		12.3
Short-Term Investments		9.7
Food Products		9.5
Road & Rail		6.6
Household Products		5.7
Beverages		5.6
Banks		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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Advantage Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $1,283,964)	$	1,451,042
Investment in Security of Affiliated Issuer, at Value (Cost $155,915)		155,915
Total Investments in Securities, at Value (Cost $1,439,879)		1,606,957
Foreign Currency, at Value (Cost $818)		818
Cash		505
Receivable for Fund Shares Sold		9,170
Receivable for Investments Sold		2,345
Dividends Receivable		1,011
Tax Reclaim Receivable		724
Receivable from Affiliate		266
Receivable from Securities Lending Income		19
Other Assets		240
Total Assets		1,622,055
Liabilities:
Payable for Investments Purchased		14,401
Payable for Advisory Fees		2,650
Due to Broker		1,530
Deferred Capital Gain Country Tax		1,404
Payable for Fund Shares Redeemed		647
Payable for Administration Fees		100
Payable for Shareholder Services Fees — Class A		57
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		12
Payable for Professional Fees		52
Payable for Transfer Agency Fees — Class I		13
Payable for Transfer Agency Fees — Class A		5
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Sub Transfer Agency Fees — Class A		16
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		2
Payable for Custodian Fees		5
Other Liabilities		13
Total Liabilities		20,907
Net Assets	$	1,601,148
Net Assets Consist of:
Paid-in-Capital	$	1,427,469
Total Distributable Earnings		173,679
Net Assets	$	1,601,148

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Advantage Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	1,299,237
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		68,307,760
Net Asset Value, Offering and Redemption Price Per Share	$	19.02
CLASS A:
Net Assets	$	286,406
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		15,256,495
Net Asset Value, Redemption Price Per Share	$	18.77
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.04
Maximum Offering Price Per Share	$	19.81
CLASS L:
Net Assets	$	236
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		12,915
Net Asset Value, Offering and Redemption Price Per Share	$	18.27
CLASS C:
Net Assets	$	15,259
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		845,340
Net Asset Value, Offering and Redemption Price Per Share	$	18.05
CLASS IS:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		529
Net Asset Value, Offering and Redemption Price Per Share	$	19.03
(1) Including: Securities on Loan, at Value:	$	6,276

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Advantage Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1,021 of Foreign Taxes Withheld)	$	9,526
Dividends from Security of Affiliated Issuer (Note G)		1,367
Income from Securities Loaned — Net		112
Total Investment Income		11,005
Expenses:
Advisory Fees (Note B)		4,701
Sub Transfer Agency Fees — Class I		329
Sub Transfer Agency Fees — Class A		149
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		5
Administration Fees (Note C)		476
Shareholder Services Fees — Class A (Note D)		300
Distribution and Shareholder Services Fees — Class L (Note D)		1
Distribution and Shareholder Services Fees — Class C (Note D)		63
Custodian Fees (Note F)		91
Registration Fees		78
Professional Fees		64
Shareholder Reporting Fees		35
Transfer Agency Fees — Class I (Note E)		25
Transfer Agency Fees — Class A (Note E)		5
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		12
Pricing Fees		1
Other Expenses		19
Total Expenses		6,357
Rebate from Morgan Stanley Affiliate (Note G)		(117	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Net Expenses		6,238
Net Investment Income		4,767
Realized Gain (Loss):
Investments Sold		3,813
Foreign Currency Translation		(17	)
Net Realized Gain		3,796
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $1,263)		193,644
Foreign Currency Translation		48
Net Change in Unrealized Appreciation (Depreciation)		193,692
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		197,488
Net Increase in Net Assets Resulting from Operations	$	202,255

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

International Advantage Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	4,767		$	352
Net Realized Gain		3,796			10,167
Net Change in Unrealized Appreciation (Depreciation)		193,692			(65,723	)
Net Increase (Decrease) in Net Assets Resulting from Operations		202,255			(55,204	)
Dividends and Distributions to Shareholders:
Class I		—			(7,460	)
Class A		—			(3,589	)
Class L		—			(3	)
Class C		—			(193	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(11,245	)
Capital Share Transactions:(1)
Class I:
Subscribed		662,481			540,991
Distributions Reinvested		—			7,436
Redeemed		(90,539	)		(101,820	)
Class A:
Subscribed		123,418			225,567
Distributions Reinvested		—			3,589
Redeemed		(81,884	)		(148,854	)
Class L:
Exchanged		35			75
Distributions Reinvested		—			3
Redeemed		(—	@)		(33	)
Class C:
Subscribed		4,686			8,414
Distributions Reinvested		—			193
Redeemed		(2,739	)		(2,953	)
Class IS:
Subscribed		—			10	(a)
Net Increase in Net Assets Resulting from Capital Share Transactions		615,458			532,618
Redemption Fees		39			31
Total Increase in Net Assets		817,752			466,200
Net Assets:
Beginning of Period		783,396			317,196
End of Period	$	1,601,148		$	783,396

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

International Advantage Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		37,191			31,862
Shares Issued on Distributions Reinvested		—			468
Shares Redeemed		(5,058	)		(5,996	)
Net Increase in Class I Shares Outstanding		32,133			26,334
Class A:
Shares Subscribed		7,039			12,985
Shares Issued on Distributions Reinvested		—			228
Shares Redeemed		(4,812	)		(8,785	)
Net Increase in Class A Shares Outstanding		2,227			4,428
Class L:
Shares Exchanged		2			4
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(—	@@)		(2	)
Net Increase in Class L Shares Outstanding		2			2
Class C:
Shares Subscribed		271			494
Shares Issued on Distributions Reinvested		—			13
Shares Redeemed		(164	)		(183	)
Net Increase in Class C Shares Outstanding		107			324
Class IS:
Shares Subscribed		—			1	(a)

@  Amount is less than $500.

@@  Amount is less than 500 shares.

(a)  For the period June 15, 2018 through December 31, 2018.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Advantage Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	15.74		$	16.89		$	11.91		$	11.80		$	12.36		$	12.36
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.08			0.04			0.00	(3)		0.02			0.10			0.13
Net Realized and Unrealized Gain (Loss)		3.20			(0.91	)		5.32			0.29			1.18			0.20
Total from Investment Operations		3.28			(0.87	)		5.32			0.31			1.28			0.33
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.10	)		(0.07	)
Net Realized Gain		—			(0.28	)		(0.34	)		(0.20	)		(1.74	)		(0.26	)
Total Distributions		—			(0.28	)		(0.34	)		(0.20	)		(1.84	)		(0.33	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—			0.00	(3)
Net Asset Value, End of Period	$	19.02		$	15.74		$	16.89		$	11.91		$	11.80		$	12.36
Total Return(4)		20.84	%(8)		(5.19	)%		44.75	%		2.47	%		10.23	%		2.58	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,299,237		$	569,408		$	166,189		$	29,781		$	2,361		$	3,387
Ratio of Expenses Before Expense Limitation		1.00	%(9)		1.11	%		1.21	%		2.26	%		4.82	%		5.47	%
Ratio of Expenses After Expense Limitation		0.98	%(5)(9)		0.98	%(5)		0.98	%(5)		0.99	%(5)		1.16	%(5)(6)		1.24	%(5)
Ratio of Net Investment Income		0.88	%(5)(9)		0.21	%(5)		0.02	%(5)		0.20	%(5)		0.76	%(5)		1.05	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(9)		0.02	%		0.02	%		0.01	%		0.00	%(7)		0.01	%
Portfolio Turnover Rate		9	%(8)		29	%		30	%		23	%		96	%		30	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2015, 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, 2015, the maximum ratio was 1.25% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Advantage Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	15.56		$	16.75		$	11.86		$	11.79		$	12.37		$	12.38
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.05			(0.02	)		(0.07	)		(0.00	)(3)		0.01			0.09
Net Realized and Unrealized Gain (Loss)		3.16			(0.89	)		5.30			0.27			1.23			0.19
Total from Investment Operations		3.21			(0.91	)		5.23			0.27			1.24			0.28
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.08	)		(0.03	)
Net Realized Gain		—			(0.28	)		(0.34	)		(0.20	)		(1.74	)		(0.26	)
Total Distributions		—			(0.28	)		(0.34	)		(0.20	)		(1.82	)		(0.29	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—			0.00	(3)
Net Asset Value, End of Period	$	18.77		$	15.56		$	16.75		$	11.86		$	11.79		$	12.37
Total Return(4)		20.63	%(8)		(5.48	)%		44.18	%		2.13	%		9.92	%		2.21	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	286,406		$	202,732		$	144,112		$	10,822		$	2,966		$	889
Ratio of Expenses Before Expense Limitation		1.30	%(9)		1.37	%		1.42	%		2.55	%		5.77	%		6.03	%
Ratio of Expenses After Expense Limitation		1.28	%(5)(9)		1.33	%(5)		1.31	%(5)		1.34	%(5)		1.46	%(5)(6)		1.59	%(5)
Ratio of Net Investment Income (Loss)		0.54	%(5)(9)		(0.10	)%(5)		(0.46	)%(5)		(0.04	)%(5)		0.09	%(5)		0.70	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(9)		0.02	%		0.02	%		0.01	%		0.00	%(7)		0.01	%
Portfolio Turnover Rate		9	%(8)		29	%		30	%		23	%		96	%		30	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to July 1, 2015, the maximum ratio was 1.60% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Advantage Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	15.18		$	16.43		$	11.70		$	11.69		$	12.31		$	12.36
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.01	)		(0.09	)		(0.11	)		(0.06	)		(0.04	)		0.02
Net Realized and Unrealized Gain (Loss)		3.10			(0.88	)		5.18			0.27			1.20			0.20
Total from Investment Operations		3.09			(0.97	)		5.07			0.21			1.16			0.22
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.04	)		(0.01	)
Net Realized Gain		—			(0.28	)		(0.34	)		(0.20	)		(1.74	)		(0.26	)
Total Distributions		—			(0.28	)		(0.34	)		(0.20	)		(1.78	)		(0.27	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		—			0.00	(3)
Net Asset Value, End of Period	$	18.27		$	15.18		$	16.43		$	11.70		$	11.69		$	12.31
Total Return(4)		20.29	%(8)		(5.95	)%		43.41	%		1.64	%		9.34	%		1.69	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	236		$	161		$	135		$	75		$	211		$	148
Ratio of Expenses Before Expense Limitation		2.49	%(9)		2.82	%		3.82	%		3.96	%		6.87	%		7.42	%
Ratio of Expenses After Expense Limitation		1.83	%(5)(9)		1.83	%(5)		1.84	%(5)		1.84	%(5)		1.97	%(5)(6)		2.09	%(5)
Ratio of Net Investment Income (Loss)		(0.07	)%(5)(9)		(0.55	)%(5)		(0.77	)%(5)		(0.52	)%(5)		(0.31	)%(5)		0.20	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(9)		0.02	%		0.01	%		0.01	%		0.00	%(7)		0.01	%
Portfolio Turnover Rate		9	%(8)		29	%		30	%		23	%		96	%		30	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to July 1, 2015, the maximum ratio was 2.10% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Advantage Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	15.02		$	16.30		$	11.63		$	11.66		$	13.80
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.02	)		(0.15	)		(0.17	)		(0.11	)		(0.08	)
Net Realized and Unrealized Gain (Loss)		3.05			(0.85	)		5.18			0.28			(0.26	)
Total from Investment Operations		3.03			(1.00	)		5.01			0.17			(0.34	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.06	)
Net Realized Gain		—			(0.28	)		(0.34	)		(0.20	)		(1.74	)
Total Distributions		—			(0.28	)		(0.34	)		(0.20	)		(1.80	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		—
Net Asset Value, End of Period	$	18.05		$	15.02		$	16.30		$	11.63		$	11.66
Total Return(5)		20.17	%(9)		(6.18	)%		43.16	%		1.38	%		(2.63	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	15,259		$	11,087		$	6,760		$	1,067		$	247
Ratio of Expenses Before Expense Limitation		2.03	%(10)		2.10	%		2.25	%		3.60	%		9.11	%(10)
Ratio of Expenses After Expense Limitation		2.01	%(6)(10)		2.07	%(6)		2.08	%(6)		2.09	%(6)		2.11	%(6)(7)(10)
Ratio of Net Investment Loss		(0.24	)%(6)(10)		(0.88	)%(6)		(1.12	)%(6)		(0.91	)%(6)		(0.94	)%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(10)		0.02	%		0.02	%		0.01	%		0.00	%(8)(10)
Portfolio Turnover Rate		9	%(9)		29	%		30	%		23	%		96	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(7)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class C shares. Prior to July 1, 2015, the maximum ratio was 2.35% for Class C shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Advantage Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	15.75		$	18.90
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.07			(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		3.21			(2.87	)
Total from Investment Operations		3.28			(2.87	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.28	)
Redemption Fees		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	19.03		$	15.75
Total Return(4)		20.83	%(6)		(15.22	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10		$	8
Ratio of Expenses Before Expense Limitation		18.41	%(7)		19.51	%(7)
Ratio of Expenses After Expense Limitation		0.93	%(5)(7)		0.93	%(5)(7)
Ratio of Net Investment Income (Loss)		0.83	%(5)(7)		(0.04	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.02	%(7)		0.02	%(7)
Portfolio Turnover Rate		9	%(6)		29	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the International Advantage Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if

there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) 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 its latest bid and ask prices. Unlisted options are valued at the

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) 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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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
Banks	$	—	$	87,820	$	—	$	87,820
Beverages		—		89,595		—		89,595
Biotechnology		—		40,301		—		40,301
Capital Markets		34,778		24,382		—		59,160
Chemicals		—		45,185		—		45,185
Diversified Consumer Services		51,917		—		—		51,917
Electronic Equipment, Instruments & Components		—		78,968		—		78,968
Food Products		—		152,574		—		152,574
Hotels, Restaurants & Leisure		—		15,846		—		15,846
Household Products		—		92,366		—		92,366
Information Technology Services		79,098		—		—		79,098
Insurance		—		45,730		—		45,730
Interactive Media & Services		—		57,985		—		57,985
Internet & Direct Marketing Retail		55,548		—		—		55,548
Machinery		—		15,336		—		15,336
Marine		—		28,995		—		28,995
Multi-Utilities		45,067		—		—		45,067
Road & Rail		—		105,358		—		105,358
Semiconductors & Semiconductor Equipment		22,824		46,429		—		69,253
Software		36,504		—		—		36,504
Textiles, Apparel & Luxury Goods		—		197,045		—		197,045
Total Common Stocks		325,736		1,123,915		—		1,449,651
Call Options Purchased		—		1,391				1,391
Short-Term Investment
Investment Company		155,915		—		—		155,915
Total Assets	$	481,651	$	1,125,306	$	—	$	1,606,957

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund 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 in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund 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 Fund 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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

FASB ASC 815, "Derivatives and Hedging" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	1,391	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gain (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$(329)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)		$(929)(c)

c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	1,391	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) 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 Fund 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 Fund 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 potential 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 Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	373		$	—	$	(373	)	$	0
Royal Bank of Scotland		1,018			—		(1,018	)		0
Total	$	1,391	(a)	$	—	$	(1,391	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

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

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

For the six months ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	407,169,000

5.  Securities Lending: The Fund 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 Fund. The Fund 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 Fund'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 Fund has the right under the securities 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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	6,276	(a)	$	—	$	(6,156	)(b)	$	120

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

(b) The Fund received non-cash collateral of approximately $6,156,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

6.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

8.  Dividends and Distributions to Shareholders: Dividends 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.

9.  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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the six months ended June 30, 2019, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.77% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual fund operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $2,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $657,156,000 and $94,234,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Fund 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, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $117,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	109,356	$	293,332	$	246,773	$	1,367

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	155,915

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	44	$	11,201	$	2,814	$	3,157

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

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2018.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	—	$	3,391

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	2	$	—

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 37.7%.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund'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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee was higher than but close to its peer group average and total expense ratio was lower than its peer group average. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

26

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

27

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

29

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIIASAN
2669060 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Equity Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	16
Investment Advisory Agreement Approval	24
Privacy Notice	26
Director and Officer Information	28

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in International Equity Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

International Equity Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Equity Portfolio Class I	$	1,000.00	$	1,140.10	$	1,020.08	$	5.04	$	4.76		0.95	%
International Equity Portfolio Class A		1,000.00		1,138.60		1,018.35		6.89		6.51		1.30
International Equity Portfolio Class L		1,000.00		1,135.50		1,015.97		9.42		8.90		1.78
International Equity Portfolio Class C		1,000.00		1,134.60		1,014.63		10.85		10.24		2.05
International Equity Portfolio Class IS		1,000.00		1,140.10		1,020.28		4.83		4.56		0.91

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

International Equity Portfolio

	Shares		Value (000)
Common Stocks (97.8%)
Canada (5.7%)
Barrick Gold Corp.		3,521,472	$	55,583
Cameco Corp.		1,263,494		13,546
Constellation Software, Inc.		70,057		66,029
				135,158
China (3.3%)
China Petroleum & Chemical Corp. H Shares (a)		50,218,000		34,197
Tencent Holdings Ltd. (a)		986,800		44,643
				78,840
Denmark (0.4%)
Danske Bank A/S		626,518		9,906
Finland (1.3%)
Neste Oyj		941,879		32,018
France (14.8%)
AXA SA		1,588,915		41,741
L'Oreal SA		85,429		24,334
Pernod Ricard SA (b)		392,219		72,277
Safran SA		472,403		69,222
Sanofi		795,306		68,801
Thales SA		251,914		31,126
TOTAL SA		749,915		41,958
				349,459
Germany (15.1%)
Bayer AG (Registered)		725,569		50,397
Continental AG		91,099		13,282
Deutsche Post AG (Registered)		1,381,571		45,372
Fresenius SE & Co., KGaA		1,241,169		67,242
HeidelbergCement AG		307,249		24,852
Henkel AG & Co., KGaA (Preference)		707,982		69,292
SAP SE		632,555		86,952
				357,389
Hong Kong (3.5%)
AIA Group Ltd.		6,688,000		72,302
Minth Group Ltd. (b)		3,730,000		10,064
				82,366
Japan (11.8%)
FANUC Corp.		160,600		29,813
Hoya Corp.		85,400		6,560
Keyence Corp.		45,800		28,146
Kirin Holdings Co., Ltd.		3,226,300		69,635
Lion Corp.		1,061,800		19,811
Nitto Denko Corp.		277,800		13,682
Shiseido Co., Ltd.		610,800		46,132
Sumitomo Mitsui Financial Group, Inc.		881,351		31,209
Toyota Motor Corp.		275,900		17,149
USS Co., Ltd.		817,200		16,129
				278,266

	Shares		Value (000)
Korea, Republic of (2.0%)
LG Household & Health Care Ltd.		36,028	$	41,000
NCSoft Corp.		16,366		6,760
				47,760
Netherlands (8.3%)
Heineken N.V.		620,354		69,244
ING Groep N.V.		2,831,632		32,835
Unilever N.V. CVA		1,542,118		93,937
				196,016
Portugal (0.1%)
Banco Comercial Portugues SA		7,484,822		2,314
Singapore (1.4%)
United Overseas Bank Ltd.		1,678,700		32,435
Spain (0.7%)
Banco Bilbao Vizcaya Argentaria SA		1,959,806		10,960
Bankinter SA		722,583		4,978
				15,938
Switzerland (4.8%)
Alcon, Inc. (c)		170,543		10,548
Novartis AG (Registered)		719,511		65,811
Roche Holding AG (Genusschein)		134,844		37,941
				114,300
Taiwan (1.0%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		603,959		23,657
United Kingdom (23.6%)
Admiral Group PLC		337,533		9,483
Ashtead Group PLC		587,870		16,861
Aviva PLC		6,445,382		34,186
British American Tobacco PLC		1,707,515		59,599
BT Group PLC		8,278,839		20,694
Experian PLC		722,460		21,932
Ferguson PLC (c)		180,872		12,892
GlaxoSmithKline PLC		3,678,535		73,635
Imperial Brands PLC		1,972,573		46,317
Man Group PLC		12,853,275		25,431
Prudential PLC		2,780,936		60,571
Reckitt Benckiser Group PLC		1,282,675		101,367
RELX PLC		1,750,350		42,358
RELX PLC		1,404,403		34,133
				559,459
Total Common Stocks (Cost $1,774,763)				2,315,281
Short-Term Investments (5.1%)
Securities held as Collateral on Loaned Securities (3.2%)
Investment Company (2.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $58,034)		58,034,303		58,034

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

International Equity Portfolio

	Face Amount (000)		Value (000)
Repurchase Agreements (0.7%)
Barclays Capital, Inc., (2.50%, dated 6/28/19, due 7/1/19; proceeds $2,689; fully collateralized by a U.S. Government obligation; 3.63% due 2/15/44; valued at $2,742)	$	2,689	$	2,689
Merrill Lynch & Co., Inc., (2.48%, dated 6/28/19, due 7/1/19; proceeds $15,053; fully collateralized by U.S. Government obligations; 2.13% - 2.50% due 2/15/41 - 5/15/46; valued at $15,350)		15,049		15,049
				17,738
Total Securities held as Collateral on Loaned Securities (Cost $75,772)				75,772
	Shares
Investment Company (1.9%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $45,002)		45,002,475		45,002
Total Short-Term Investments (Cost $120,774)				120,774
Total Investments (102.9%) (Cost $1,895,537) Including $81,103 of Securities Loaned (d)(e)				2,436,055
Liabilities in Excess of Other Assets (–2.9%)				(68,821	)
Net Assets (100.0%)			$	2,367,234

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Security trades on the Hong Kong exchange.

(b)  All or a portion of this security was on loan at June 30, 2019.

(c)  Non-income producing security.

(d)  The approximate fair value and percentage of net assets, $2,131,035,000 and 90.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(e)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $648,218,000 and the aggregate gross unrealized depreciation is approximately $107,700,000, resulting in net unrealized appreciation of approximately $540,518,000.

ADR  American Depositary Receipt.

CVA  Certificaten Van Aandelen.

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		35.5	%
Pharmaceuticals		12.6
Insurance		9.2
Beverages		8.9
Personal Products		8.7
Household Products		8.1
Software		6.5
Banks		5.3
Oil, Gas & Consumable Fuels		5.2
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2019.

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

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Equity Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $1,792,501)	$	2,333,019
Investment in Security of Affiliated Issuer, at Value (Cost $103,036)		103,036
Total Investments in Securities, at Value (Cost $1,895,537)		2,436,055
Foreign Currency, at Value (Cost $1,813)		1,806
Cash from Securities Lending		437
Receivable for Investments Sold		62,700
Tax Reclaim Receivable		8,116
Dividends Receivable		3,435
Receivable for Fund Shares Sold		283
Receivable from Affiliate		59
Receivable from Securities Lending Income		22
Other Assets		271
Total Assets		2,513,184
Liabilities:
Collateral on Securities Loaned, at Value		76,209
Payable for Investments Purchased		63,072
Payable for Advisory Fees		4,513
Payable for Fund Shares Redeemed		1,122
Payable for Sub Transfer Agency Fees — Class I		284
Payable for Sub Transfer Agency Fees — Class A		212
Payable for Sub Transfer Agency Fees — Class L		1
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Administration Fees		154
Payable for Custodian Fees		69
Payable for Shareholder Services Fees — Class A		50
Payable for Distribution and Shareholder Services Fees — Class L		4
Payable for Distribution and Shareholder Services Fees — Class C		1
Payable for Professional Fees		51
Payable for Transfer Agency Fees — Class I		6
Payable for Transfer Agency Fees — Class A		4
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		1
Other Liabilities		196
Total Liabilities		145,950
Net Assets	$	2,367,234
Net Assets Consist of:
Paid-in-Capital	$	1,721,315
Total Distributable Earnings		645,919
Net Assets	$	2,367,234

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Equity Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	1,622,439
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		105,509,670
Net Asset Value, Offering and Redemption Price Per Share	$	15.38
CLASS A:
Net Assets	$	232,040
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		15,189,723
Net Asset Value, Redemption Price Per Share	$	15.28
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.85
Maximum Offering Price Per Share	$	16.13
CLASS L:
Net Assets	$	6,110
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		405,156
Net Asset Value, Offering and Redemption Price Per Share	$	15.08
CLASS C:
Net Assets	$	661
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		44,569
Net Asset Value, Offering and Redemption Price Per Share	$	14.84
CLASS IS:
Net Assets	$	505,984
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		32,900,418
Net Asset Value, Offering and Redemption Price Per Share	$	15.38
(1) Including: Securities on Loan, at Value:	$	81,103

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Equity Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $4,598 of Foreign Taxes Withheld)	$	45,192
Dividends from Security of Affiliated Issuer (Note G)		400
Income from Securities Loaned — Net		282
Total Investment Income		45,874
Expenses:
Advisory Fees (Note B)		9,660
Sub Transfer Agency Fees — Class I		829
Sub Transfer Agency Fees — Class A		230
Sub Transfer Agency Fees — Class L		2
Sub Transfer Agency Fees — Class C		—	@
Administration Fees (Note C)		966
Shareholder Services Fees — Class A (Note D)		312
Distribution and Shareholder Services Fees — Class L (Note D)		22
Distribution and Shareholder Services Fees — Class C (Note D)		3
Custodian Fees (Note F)		157
Professional Fees		53
Registration Fees		47
Shareholder Reporting Fees		46
Directors' Fees and Expenses		38
Transfer Agency Fees — Class I (Note E)		10
Transfer Agency Fees — Class A (Note E)		7
Transfer Agency Fees — Class L (Note E)		2
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Pricing Fees		2
Other Expenses		41
Expenses Before Non Operating Expenses		12,429
Bank Overdraft Expense		11
Total Expenses		12,440
Reimbursement of Class Specific Expenses — Class I (Note B)		(504	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(62	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Rebate from Morgan Stanley Affiliate (Note G)		(35	)
Waiver of Advisory Fees (Note B)		(21	)
Net Expenses		11,815
Net Investment Income		34,059
Realized Gain (Loss):
Investments Sold		84,203
Foreign Currency Translation		(56	)
Net Realized Gain		84,147
Change in Unrealized Appreciation (Depreciation):
Investments		209,485
Foreign Currency Translation		(2	)
Net Change in Unrealized Appreciation (Depreciation)		209,483
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		293,630
Net Increase in Net Assets Resulting from Operations	$	327,689

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

International Equity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	34,059		$	66,419
Net Realized Gain		84,147			397,017
Net Change in Unrealized Appreciation (Depreciation)		209,483			(916,662	)
Net Increase (Decrease) in Net Assets Resulting from Operations		327,689			(453,226	)
Dividends and Distributions to Shareholders:
Class I		—			(239,211	)
Class A		—			(35,769	)
Class L		—			(631	)
Class C		—			(98	)
Class IS		—			(61,348	)
Total Dividends and Distributions to Shareholders		—			(337,057	)
Capital Share Transactions:(1)
Class I:
Subscribed		75,643			851,975
Distributions Reinvested		—			226,885
Redeemed		(408,565	)		(503,337	)
Class A:
Subscribed		6,698			67,050
Distributions Reinvested		—			35,438
Redeemed		(51,836	)		(984,495	)
Class L:
Exchanged		—			1,371
Distributions Reinvested		—			624
Redeemed		(679	)		(1,549	)
Class C:
Subscribed		24			314
Distributions Reinvested		—			96
Redeemed		(244	)		(74	)
Class IS:
Subscribed		9,937			58,361
Distributions Reinvested		—			53,242
Redeemed		(31,016	)		(737,033	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(400,038	)		(931,132	)
Redemption Fees		8			24
Total Decrease in Net Assets		(72,341	)		(1,721,391	)
Net Assets:
Beginning of Period		2,439,575			4,160,966
End of Period	$	2,367,234		$	2,439,575

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

International Equity Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		5,239			48,024
Shares Issued on Distributions Reinvested		—			16,732
Shares Redeemed		(27,666	)		(30,945	)
Net Increase (Decrease) in Class I Shares Outstanding		(22,427	)		33,811
Class A:
Shares Subscribed		478			4,034
Shares Issued on Distributions Reinvested		—			2,603
Shares Redeemed		(3,516	)		(57,785	)
Net Decrease in Class A Shares Outstanding		(3,038	)		(51,148	)
Class L:
Shares Exchanged		—			103
Shares Issued on Distributions Reinvested		—			47
Shares Redeemed		(48	)		(98	)
Net Increase (Decrease) in Class L Shares Outstanding		(48	)		52
Class C:
Shares Subscribed		2			19
Shares Issued on Distributions Reinvested		—			7
Shares Redeemed		(18	)		(5	)
Net Increase (Decrease) in Class C Shares Outstanding		(16	)		21
Class IS:
Shares Subscribed		682			3,302
Shares Issued on Distributions Reinvested		—			3,921
Shares Redeemed		(2,098	)		(41,355	)
Net Decrease in Class IS Shares Outstanding		(1,416	)		(34,132	)

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Equity Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	13.49		$	17.97		$	14.64		$	15.10		$	15.47		$	16.98
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.20			0.31			0.26			0.27			0.30			0.39
Net Realized and Unrealized Gain (Loss)		1.69			(2.78	)		3.41			(0.57	)		(0.23	)		(1.42	)
Total from Investment Operations		1.89			(2.47	)		3.67			(0.30	)		0.07			(1.03	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.39	)		(0.34	)		(0.16	)		(0.44	)		(0.48	)
Net Realized Gain		—			(1.62	)		—			—			—			—
Total Distributions		—			(2.01	)		(0.34	)		(0.16	)		(0.44	)		(0.48	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	15.38		$	13.49		$	17.97		$	14.64		$	15.10		$	15.47
Total Return(4)		14.01	%(7)		(13.80	)%		25.17	%		(2.00	)%		0.36	%		(6.08	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,622,439		$	1,725,392		$	1,691,807		$	1,719,699		$	2,073,782		$	2,620,040
Ratio of Expenses Before Expense Limitation		1.01	%(8)		0.99	%		0.99	%		0.98	%		1.01	%		1.04	%
Ratio of Expenses After Expense Limitation		0.95	%(5)(8)		0.95	%(5)		0.95	%(5)		0.95	%(5)		0.95	%(5)		0.95	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.95	%(5)(8)		N/A			N/A			0.95	%(5)		0.95	%(5)		0.95	%(5)
Ratio of Net Investment Income		2.81	%(5)(8)		1.82	%(5)		1.54	%(5)		1.86	%(5)		1.85	%(5)		2.33	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		10	%(7)		34	%		18	%		33	%		29	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Equity Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	13.42		$	17.75		$	14.46		$	14.91		$	15.28		$	16.78
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.19			0.32			0.19			0.23			0.24			0.31
Net Realized and Unrealized Gain (Loss)		1.67			(2.82	)		3.38			(0.58	)		(0.23	)		(1.38	)
Total from Investment Operations		1.86			(2.50	)		3.57			(0.35	)		0.01			(1.07	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.21	)		(0.28	)		(0.10	)		(0.38	)		(0.43	)
Net Realized Gain		—			(1.62	)		—			—			—			—
Total Distributions		—			(1.83	)		(0.28	)		(0.10	)		(0.38	)		(0.43	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	15.28		$	13.42		$	17.75		$	14.46		$	14.91		$	15.28
Total Return(4)		13.86	%(7)		(14.13	)%		24.77	%		(2.33	)%		(0.02	)%		(6.43	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	232,040		$	244,622		$	1,231,279		$	1,176,835		$	1,369,566		$	1,576,475
Ratio of Expenses Before Expense Limitation		1.35	%(8)		1.31	%		1.31	%		1.30	%		1.32	%		1.34	%
Ratio of Expenses After Expense Limitation		1.30	%(5)(8)		1.30	%(5)		1.30	%(5)		1.29	%(5)		1.30	%(5)		1.30	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.30	%(5)(8)		N/A			N/A			1.29	%(5)		1.30	%(5)		1.30	%(5)
Ratio of Net Investment Income		2.56	%(5)(8)		1.83	%(5)		1.16	%(5)		1.60	%(5)		1.48	%(5)		1.89	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.01	%		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		10	%(7)		34	%		18	%		33	%		29	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Equity Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	13.28		$	17.70		$	14.43		$	14.87		$	15.23		$	16.71
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.15			0.10			0.11			0.16			0.15			0.24
Net Realized and Unrealized Gain (Loss)		1.65			(2.66	)		3.35			(0.58	)		(0.21	)		(1.39	)
Total from Investment Operations		1.80			(2.56	)		3.46			(0.42	)		(0.06	)		(1.15	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.24	)		(0.19	)		(0.02	)		(0.30	)		(0.33	)
Net Realized Gain		—			(1.62	)		—			—			—			—
Total Distributions		—			(1.86	)		(0.19	)		(0.02	)		(0.30	)		(0.33	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	15.08		$	13.28		$	17.70		$	14.43		$	14.87		$	15.23
Total Return(4)		13.55	%(7)		(14.49	)%		24.06	%		(2.82	)%		(0.47	)%		(6.91	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	6,110		$	6,022		$	7,099		$	7,008		$	9,053		$	9,763
Ratio of Expenses Before Expense Limitation		N/A			N/A			1.90	%		1.93	%		1.89	%		1.89	%
Ratio of Expenses After Expense Limitation		1.79	%(5)(8)		1.72	%(5)		1.80	%(5)		1.80	%(5)		1.80	%(5)		1.80	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.78	%(5)(8)		N/A%			N/A%			1.80	%(5)		1.80	%(5)		1.80	%(5)
Ratio of Net Investment Income		2.09	%(5)(8)		1.17	%(5)		0.69	%(5)		1.09	%(5)		0.97	%(5)		1.48	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		10	%(7)		34	%		18	%		33	%		29	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Equity Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	13.08		$	17.51		$	14.31		$	14.77		$	16.70
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		0.12			0.05			0.04			0.14			(0.03	)
Net Realized and Unrealized Gain (Loss)		1.64			(2.64	)		3.35			(0.58	)		(1.53	)
Total from Investment Operations		1.76			(2.59	)		3.39			(0.44	)		(1.56	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.22	)		(0.19	)		(0.02	)		(0.37	)
Net Realized Gain		—			(1.62	)		—			—			—
Total Distributions		—			(1.84	)		(0.19	)		(0.02	)		(0.37	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	14.84		$	13.08		$	17.51		$	14.31		$	14.77
Total Return(5)		13.46	%(8)		(14.82	)%		23.78	%		(3.01	)%		(9.41	)%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	661		$	787		$	677		$	476		$	372
Ratio of Expenses Before Expense Limitation		2.29	%(9)		2.27	%		2.41	%		2.40	%		2.75	%(9)
Ratio of Expenses After Expense Limitation		2.05	%(6)(9)		2.05	%(6)		2.05	%(6)		2.05	%(6)		2.05	%(6)(9)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		2.05	%(6)(9)		N/A			N/A			2.05	%(6)		2.05	%(6)(9)
Ratio of Net Investment Income (Loss)		1.64	%(6)(9)		0.83	%(6)		0.22	%(6)		0.95	%(6)		(0.27	)%(6)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		10	%(8)		34	%		18	%		33	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Equity Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	13.48		$	17.97		$	14.64		$	15.10		$	15.47		$	16.98
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.22			0.38			0.26			0.29			0.30			0.40
Net Realized and Unrealized Gain (Loss)		1.68			(2.86	)		3.42			(0.59	)		(0.23	)		(1.43	)
Total from Investment Operations		1.90			(2.48	)		3.68			(0.30	)		0.07			(1.03	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.39	)		(0.35	)		(0.16	)		(0.44	)		(0.48	)
Net Realized Gain		—			(1.62	)		—			—			—			—
Total Distributions		—			(2.01	)		(0.35	)		(0.16	)		(0.44	)		(0.48	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	15.38		$	13.48		$	17.97		$	14.64		$	15.10		$	15.47
Total Return(4)		14.01	%(7)		(13.76	)%		25.22	%		(1.95	)%		0.40	%		(6.07	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	505,984		$	462,752		$	1,230,104		$	1,058,165		$	872,167		$	715,262
Ratio of Expenses Before Expense Limitation		0.91	%(8)		N/A			0.91	%		0.91	%		0.91	%		0.91	%
Ratio of Expenses After Expense Limitation		0.91	%(5)(8)		0.90	%(5)		0.91	%(5)		0.91	%(5)		0.91	%(5)		0.91	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.91	%(5)(8)		N/A			N/A			0.91	%(5)		0.91	%(5)		0.91	%(5)
Ratio of Net Investment Income		2.99	%(5)(8)		2.19	%(5)		1.52	%(5)		1.96	%(5)		1.84	%(5)		2.36	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		10	%(7)		34	%		18	%		33	%		29	%		29	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the International Equity Portfolio. The Fund seeks long-term capital appreciation by investing primarily in equity securities of non-U.S. issuers.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") (the "Sub-Adviser"), each a wholly-owned subsidiary of Morgan Stanley, 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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	—	$	100,348	$	—	$	100,348
Air Freight & Logistics		—		45,372		—		45,372
Auto Components		—		23,346		—		23,346
Automobiles		—		17,149		—		17,149
Banks		—		124,637		—		124,637
Beverages		—		211,156		—		211,156
Capital Markets		25,431		—		—		25,431
Chemicals		—		13,682		—		13,682
Construction Materials		—		24,852		—		24,852
Diversified Telecommunication Services		—		20,694		—		20,694
Electronic Equipment, Instruments & Components		—		28,146		—		28,146
Entertainment		—		6,760		—		6,760
Health Care Equipment & Supplies		—		17,108		—		17,108
Health Care Providers & Services		—		67,242		—		67,242
Household Products		—		190,470		—		190,470
Insurance		—		218,283		—		218,283
Interactive Media & Services		—		44,643		—		44,643
Machinery		—		29,813		—		29,813
Metals & Mining		55,583		—		—		55,583
Oil, Gas & Consumable Fuels		13,546		108,173		—		121,719
Personal Products		—		205,403		—		205,403
Pharmaceuticals		—		296,585		—		296,585
Professional Services		—		98,423		—		98,423
Semiconductors & Semiconductor Equipment		23,657		—		—		23,657
Software		66,029		86,952		—		152,981
Specialty Retail		—		16,129		—		16,129
Tobacco		—		105,916		—		105,916
Trading Companies & Distributors		—		29,753		—		29,753
Total Common Stocks		184,246		2,131,035		—		2,315,281
Short-Term Investments
Investment Company		103,036		—		—		103,036
Repurchase Agreements		—		17,738		—		17,738
Total Short-Term Investments		103,036		17,738		—		120,774
Total Assets	$	287,282	$	2,148,773	$	—	$	2,436,055

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

5.  Securities Lending: The Fund 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 in-

terest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund 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 Fund'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 Fund has the right under the securities 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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	81,103	(a)	$	—	$	(81,103	)(b)(c)	$	0

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

(b) The Fund received cash collateral of approximately $76,209,000, of which approximately $75,772,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2019, there was uninvested cash of approximately $437,000, which is not reflected in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $8,714,000 in the form of U.S. Government obligations, which the Fund 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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2019:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	76,209	$	—	$	—	$	—	$	76,209
Total Borrowings	$	76,209	$	—	$	—	$	—	$	76,209
Gross amount of recognized liabilities for securities lending transactions									$	76,209

6.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

8.  Dividends and Distributions to Shareholders: Dividends 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.

9.  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. Dividend income and other distributions are recorded on the

ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $10 billion			Over $10 billion
	0.80	%		0.75	%

Effective July 1, 2019, the Adviser will provide the Fund with advisory services under the terms of an Investment Advisory Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $3 billion			Over $3 billion
	0.80	%		0.75	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.80% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.95% for Class I shares, 1.30% for Class A shares, 1.80% for Class L shares, 2.05% for Class C shares and 0.91% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $21,000 of advisory fees were waived and approximately $569,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $242,988,000 and $478,344,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $35,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	50,406	$	341,540	$	288,910	$	400

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	103,036

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of

Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	62,556	$	274,501	$	77,241	$	—

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 in 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 equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(109,637	)	$	109,637

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	633	$	21,445

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 42.2%.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator 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 considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the three- and five-year periods but better than 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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee was higher than but close to its peer group average and the total expense ratio was lower than its peer group average. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

25

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

26

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

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

Sub-Adviser

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

Distributor

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

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

28

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIIESAN
2668913 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Opportunity Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	17
Investment Advisory Agreement Approval	27
Privacy Notice	29
Director and Officer Information	31

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in International Opportunity Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

International Opportunity Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Opportunity Portfolio Class I	$	1,000.00	$	1,250.40	$	1,019.89	$	5.52	$	4.96		0.99	%
International Opportunity Portfolio Class A		1,000.00		1,248.70		1,018.45		7.14		6.41		1.28
International Opportunity Portfolio Class L		1,000.00		1,245.50		1,015.67		10.24		9.20		1.84
International Opportunity Portfolio Class C		1,000.00		1,244.80		1,014.83		11.19		10.04		2.01
International Opportunity Portfolio Class IS		1,000.00		1,250.60		1,020.18		5.19		4.66		0.93
International Opportunity Portfolio Class IR		1,000.00		1,251.10		1,020.28		5.08		4.56		0.91

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

International Opportunity Portfolio

	Shares		Value (000)
Common Stocks (96.8%)
Argentina (1.8%)
Globant SA (a)		268,605	$	27,143
China (23.5%)
China Resources Beer Holdings Co., Ltd. (b)		5,070,666		24,000
Ctrip.com International Ltd. ADR (a)		662,270		24,444
Foshan Haitian Flavouring & Food Co., Ltd., Class A		2,924,872		44,697
Huazhu Group Ltd. ADR		851,266		30,859
HUYA, Inc. ADR (a)		937,169		23,158
Jiangsu Yanghe Brewery Joint-Stock Co., Ltd., Class A		1,452,307		25,736
Kweichow Moutai Co., Ltd., Class A		155,314		22,282
Meituan Dianping, Class B (a)(b)		4,509,200		39,565
Shenzhou International Group Holdings Ltd. (b)		1,688,100		23,126
TAL Education Group ADR (a)		2,336,073		89,004
				346,871
Denmark (4.8%)
DSV A/S		720,478		70,736
France (3.9%)
Hermes International		79,079		57,035
Germany (2.6%)
Adidas AG		96,407		29,763
Nemetschek SE		154,676		9,313
				39,076
Hong Kong (4.9%)
China East Education Holdings Ltd.		14,615,000		20,804
Haidilao International Holding Ltd. (c)(d)		5,152,000		21,558
Hong Kong Exchanges & Clearing Ltd.		857,100		30,295
				72,657
India (6.2%)
HDFC Bank Ltd.		1,971,630		70,007
Kotak Mahindra Bank Ltd.		1,000,194		21,442
				91,449
Italy (6.3%)
Moncler SpA		2,183,972		93,376
Japan (9.9%)
Calbee, Inc.		741,000		19,968
Keyence Corp.		87,600		53,833
Nihon M&A Center, Inc.		1,249,200		30,073
Pigeon Corp.		536,200		21,630
Yume No Machi Souzou Iinkai Co. Ltd. (d)		1,403,900		20,553
				146,057
Korea, Republic of (1.5%)
NAVER Corp.		223,637		22,077
Netherlands (1.4%)
ASML Holding N.V.		97,838		20,455

	Shares		Value (000)
Sweden (2.3%)
Vitrolife AB		1,735,522	$	33,848
Switzerland (1.8%)
Chocoladefabriken Lindt & Spruengli AG (Registered)		318		25,874
Taiwan (2.4%)
Taiwan Semiconductor Manufacturing Co., Ltd.		4,696,000		35,824
United Kingdom (7.8%)
Fevertree Drinks PLC		1,315,678		38,869
Just Eat PLC (a)		3,212,760		25,512
Reckitt Benckiser Group PLC		247,074		19,526
Rightmove PLC		4,622,360		31,408
				115,315
United States (15.7%)
Booking Holdings, Inc. (a)		23,452		43,966
CEVA, Inc. (a)		252,391		6,146
EPAM Systems, Inc. (a)		384,155		66,497
Farfetch Ltd., Class A (a)		2,592,679		53,928
MercadoLibre, Inc. (a)		36,467		22,309
Spotify Technology SA (a)		266,281		38,935
				231,781
Total Common Stocks (Cost $1,242,159)				1,429,574
Short-Term Investments (3.3%)
Securities held as Collateral on Loaned Securities (0.0%)
Investment Company (0.0%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		469,091		469
	Face Amount (000)
Repurchase Agreements (0.0%)
Barclays Capital, Inc., (2.50%, dated 6/28/19, due 7/1/19; proceeds $22; fully collateralized by a U.S. Government obligation; 3.63% due 2/15/44; valued at $22)	$	22		22
Merrill Lynch & Co., Inc., (2.48%, dated 6/28/19, due 7/1/19; proceeds $122; fully collateralized by U.S. Government obligations; 2.13% - 2.50% due 2/15/41 - 5/15/46; valued at $124)		121		121
				143
Total Securities held as Collateral on Loaned Securities (Cost $612)				612

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

International Opportunity Portfolio

	Shares		Value (000)
Investment Company (3.3%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $48,614)		48,614,175	$	48,614
Total Short-Term Investments (Cost $49,226)				49,226
Total Investments Excluding Purchased Options (100.1%) (Cost $1,291,385)				1,478,800
Total Purchased Options Outstanding (0.1%) (Cost $4,922)				1,485
Total Investments (100.2%) (Cost $1,296,307) Including $10,842 of Securities Loaned (e)(f)				1,480,285
Liabilities in Excess of Other Assets (–0.2%)				(3,512	)
Net Assets (100.0%)			$	1,476,773

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

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

(d)  All or a portion of this security was on loan at June 30, 2019.

(e)  The approximate fair value and percentage of net assets, $912,373,000 and 61.8%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $227,875,000 and the aggregate gross unrealized depreciation is approximately $43,897,000, resulting in net unrealized appreciation of approximately $183,978,000.

ADR  American Depositary Receipt.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2019:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.58	Jan-20		205,952,091		205,952	$	475		$	1,054	$	(579	)
Royal Bank of Scotland	USD/CNH	CNH	7.78	Jul-19		253,361,109		253,361		—	@		1,234		(1,234	)
Royal Bank of Scotland	USD/CNH	CNH	7.85	Jun-20		276,248,817		276,249		902			1,426		(524	)
Royal Bank of Scotland	USD/CNH	CNH	8.00	Oct-19		205,458,191		205,458		108			1,208		(1,100	)
									$	1,485		$	4,922	$	(3,437	)

@  —  Value is less than $500.

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition*

Classification	Percentage of Total Investments
Other**		43.5	%
Internet & Direct Marketing Retail		15.6
Textiles, Apparel & Luxury Goods		13.7
Beverages		7.5
Diversified Consumer Services		7.4
Banks		6.2
Food Products		6.1
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2019.

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

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Opportunity Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $1,247,224)	$	1,431,202
Investment in Security of Affiliated Issuer, at Value (Cost $49,083)		49,083
Total Investments in Securities, at Value (Cost $1,296,307)		1,480,285
Foreign Currency, at Value (Cost $1,500)		1,498
Cash from Securities Lending		4
Receivable for Investments Sold		6,110
Receivable for Fund Shares Sold		3,922
Dividends Receivable		1,384
Tax Reclaim Receivable		250
Receivable from Affiliate		116
Receivable from Securities Lending Income		41
Other Assets		199
Total Assets		1,493,809
Liabilities:
Payable for Investments Purchased		10,290
Payable for Advisory Fees		2,697
Due to Broker		1,650
Deferred Capital Gain Country Tax		847
Collateral on Securities Loaned, at Value		616
Payable for Fund Shares Redeemed		500
Payable for Sub Transfer Agency Fees — Class I		74
Payable for Sub Transfer Agency Fees — Class A		50
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		6
Payable for Shareholder Services Fees — Class A		60
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		37
Payable for Administration Fees		94
Payable for Professional Fees		57
Payable for Transfer Agency Fees — Class I		16
Payable for Transfer Agency Fees — Class A		4
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		2
Payable for Transfer Agency Fees — Class IS		1
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Custodian Fees		13
Other Liabilities		22
Total Liabilities		17,036
Net Assets	$	1,476,773
Net Assets Consist of:
Paid-in-Capital	$	1,330,231
Total Distributable Earnings		146,542
Net Assets	$	1,476,773

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Opportunity Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	1,012,413
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		40,952,623
Net Asset Value, Offering and Redemption Price Per Share	$	24.72
CLASS A:
Net Assets	$	300,496
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		12,365,389
Net Asset Value, Redemption Price Per Share	$	24.30
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.35
Maximum Offering Price Per Share	$	25.65
CLASS L:
Net Assets	$	475
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		20,278
Net Asset Value, Offering and Redemption Price Per Share	$	23.44
CLASS C:
Net Assets	$	46,680
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,013,169
Net Asset Value, Offering and Redemption Price Per Share	$	23.19
CLASS IS:
Net Assets	$	14,626
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		590,887
Net Asset Value, Offering and Redemption Price Per Share	$	24.75
CLASS IR:
Net Assets	$	102,083
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,122,237
Net Asset Value, Offering and Redemption Price Per Share	$	24.76
(1) Including: Securities on Loan, at Value:	$	10,842

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Opportunity Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $976 of Foreign Taxes Withheld)	$	6,619
Dividends from Security of Affiliated Issuer (Note G)		836
Income from Securities Loaned — Net		622
Total Investment Income		8,077
Expenses:
Advisory Fees (Note B)		5,037
Shareholder Services Fees — Class A (Note D)		336
Distribution and Shareholder Services Fees — Class L (Note D)		2
Distribution and Shareholder Services Fees — Class C (Note D)		210
Sub Transfer Agency Fees — Class I		356
Sub Transfer Agency Fees — Class A		156
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		15
Administration Fees (Note C)		511
Custodian Fees (Note F)		117
Registration Fees		66
Professional Fees		61
Transfer Agency Fees — Class I (Note E)		27
Transfer Agency Fees — Class A (Note E)		5
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		5
Transfer Agency Fees — Class IS (Note E)		5
Transfer Agency Fees — Class IR (Note E)		1
Shareholder Reporting Fees		43
Directors' Fees and Expenses		16
Pricing Fees		1
Other Expenses		21
Total Expenses		6,992
Rebate from Morgan Stanley Affiliate (Note G)		(72	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(39	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(3	)
Net Expenses		6,877
Net Investment Income		1,200
Realized Loss:
Investments Sold		(8,397	)
Foreign Currency Translation		(117	)
Net Realized Loss		(8,514	)
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $847)		272,115
Foreign Currency Translation		5
Net Change in Unrealized Appreciation (Depreciation)		272,120
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		263,606
Net Increase in Net Assets Resulting from Operations	$	264,806

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

International Opportunity Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	1,200		$	(3,298	)
Net Realized Loss		(8,514	)		(27,142	)
Net Change in Unrealized Appreciation (Depreciation)		272,120			(171,427	)
Net Increase (Decrease) in Net Assets Resulting from Operations		264,806			(201,867	)
Dividends and Distributions to Shareholders:
Class I		—			(1,559	)
Class A		—			(642	)
Class L		—			(1	)
Class C		—			(92	)
Class IS		—			(212	)
Class IR		—			(8	)
Total Dividends and Distributions to Shareholders		—			(2,514	)
Capital Share Transactions:(1)
Class I:
Subscribed		311,128			760,795
Distributions Reinvested		—			1,546
Redeemed		(124,224	)		(336,583	)
Class A:
Subscribed		73,387			289,203
Distributions Reinvested		—			642
Redeemed		(52,051	)		(208,727	)
Class L:
Exchanged		—			70
Distributions Reinvested		—			1
Class C:
Subscribed		7,836			32,690
Distributions Reinvested		—			92
Redeemed		(5,149	)		(13,408	)
Class IS:
Subscribed		5,857			59,381
Distributions Reinvested		—			212
Redeemed		(8,787	)		(105,874	)
Class IR:
Subscribed		—			101,727
Distributions Reinvested		—			8
Net Increase in Net Assets Resulting from Capital Share Transactions		207,997			581,775
Redemption Fees		5			115
Total Increase in Net Assets		472,808			377,509
Net Assets:
Beginning of Period		1,003,965			626,456
End of Period	$	1,476,773		$	1,003,965

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

International Opportunity Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		13,461			32,491
Shares Issued on Distributions Reinvested		—			64
Shares Redeemed		(5,371	)		(15,594	)
Net Increase in Class I Shares Outstanding		8,090			16,961
Class A:
Shares Subscribed		3,215			12,370
Shares Issued on Distributions Reinvested		—			27
Shares Redeemed		(2,315	)		(9,337	)
Net Increase in Class A Shares Outstanding		900			3,060
Class L:
Shares Exchanged		—			3
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		—			(—	@@)
Net Increase in Class L Shares Outstanding		—			3
Class C:
Shares Subscribed		355			1,444
Shares Issued on Distributions Reinvested		—			4
Shares Redeemed		(236	)		(641	)
Net Increase in Class C Shares Outstanding		119			807
Class IS:
Shares Subscribed		251			2,436
Shares Issued on Distributions Reinvested		—			9
Shares Redeemed		(369	)		(4,293	)
Net Decrease in Class IS Shares Outstanding		(118	)		(1,848	)
Class IR:
Shares Subscribed		—			4,122
Shares Issued on Distributions Reinvested		—			—	@@
Net Increase in Class IR Shares Outstanding		—			4,122	(a)

(a)  For the period June 15, 2018 through December 31, 2018.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Opportunity Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	19.77		$	22.52		$	14.93		$	15.03		$	13.92		$	13.77
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.03			(0.04	)		(0.08	)		(0.03	)		(0.00	)(3)		0.08
Net Realized and Unrealized Gain (Loss)		4.92			(2.66	)		8.04			(0.07	)		1.58			0.36
Total from Investment Operations		4.95			(2.70	)		7.96			(0.10	)		1.58			0.44
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.00	)(3)		(0.03	)		(0.01	)
Net Realized Gain		—			(0.05	)		(0.37	)		—			(0.44	)		(0.28	)
Total Distributions		—			(0.05	)		(0.37	)		(0.00	)(3)		(0.47	)		(0.29	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	24.72		$	19.77		$	22.52		$	14.93		$	15.03		$	13.92
Total Return(4)		25.04	%(8)		(12.04	)%		53.38	%		(0.65	)%		11.40	%		3.14	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,012,413		$	649,580		$	358,141		$	62,440		$	52,128		$	10,943
Ratio of Expenses Before Expense Limitation		1.01	%(9)		1.04	%		1.10	%		1.34	%		1.95	%		3.25	%
Ratio of Expenses After Expense Limitation		0.99	%(5)(9)		0.99	%(5)		0.98	%(5)		1.00	%(5)		1.01	%(5)(6)		1.09	%(5)
Ratio of Net Investment Income (Loss)		0.29	%(5)(9)		(0.19	)%(5)		(0.42	)%(5)		(0.22	)%(5)		(0.01	)%(5)		0.57	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.02	%		0.00	%(7)		0.01	%		0.01	%
Portfolio Turnover Rate		13	%(8)		36	%		30	%		42	%		51	%		33	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2015, 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, 2015, the maximum ratio was 1.15% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Opportunity Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	19.46		$	22.25		$	14.79		$	14.93		$	13.87		$	13.78
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.00	)(3)		(0.11	)		(0.15	)		(0.08	)		(0.06	)		0.01
Net Realized and Unrealized Gain (Loss)		4.84			(2.63	)		7.98			(0.06	)		1.57			0.37
Total from Investment Operations		4.84			(2.74	)		7.83			(0.14	)		1.51			0.38
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.01	)		(0.01	)
Net Realized Gain		—			(0.05	)		(0.37	)		—			(0.44	)		(0.28	)
Total Distributions		—			(0.05	)		(0.37	)		—			(0.45	)		(0.29	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	24.30		$	19.46		$	22.25		$	14.79		$	14.93		$	13.87
Total Return(4)		24.87	%(8)		(12.36	)%		53.01	%		(1.00	)%		10.99	%		2.71	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	300,496		$	223,098		$	186,988		$	11,727		$	9,520		$	992
Ratio of Expenses Before Expense Limitation		1.29	%(9)		1.34	%		1.36	%		1.66	%		2.28	%		3.81	%
Ratio of Expenses After Expense Limitation		1.28	%(5)(9)		1.33	%(5)		1.27	%(5)		1.35	%(5)		1.34	%(5)(6)		1.49	%(5)
Ratio of Net Investment Income (Loss)		(0.03	)%(5)(9)		(0.51	)%(5)		(0.74	)%(5)		(0.55	)%(5)		(0.39	)%(5)		0.04	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.02	%		0.00	%(7)		0.01	%		0.01	%
Portfolio Turnover Rate		13	%(8)		36	%		30	%		42	%		51	%		33	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to July 1, 2015, the maximum ratio was 1.50% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Opportunity Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	18.82		$	21.63		$	14.47		$	14.69		$	13.71		$	13.68
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.07	)		(0.22	)		(0.22	)		(0.14	)		(0.12	)		(0.05	)
Net Realized and Unrealized Gain (Loss)		4.69			(2.54	)		7.75			(0.08	)		1.54			0.36
Total from Investment Operations		4.62			(2.76	)		7.53			(0.22	)		1.42			0.31
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.05	)		(0.37	)		—			(0.44	)		(0.28	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	23.44		$	18.82		$	21.63		$	14.47		$	14.69		$	13.71
Total Return(4)		24.55	%(8)		(12.81	)%		52.11	%		(1.50	)%		10.38	%		2.24	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	475		$	382		$	364		$	221		$	266		$	193
Ratio of Expenses Before Expense Limitation		2.13	%(9)		2.28	%		2.51	%		3.16	%		3.54	%		5.06	%
Ratio of Expenses After Expense Limitation		1.84	%(5)(9)		1.84	%(5)		1.84	%(5)		1.85	%(5)		1.91	%(5)(6)		1.99	%(5)
Ratio of Net Investment Loss		(0.61	)%(5)(9)		(1.02	)%(5)		(1.16	)%(5)		(1.00	)%(5)		(0.80	)%(5)		(0.38	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.00	%(7)		0.01	%		0.01	%
Portfolio Turnover Rate		13	%(8)		36	%		30	%		42	%		51	%		33	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to July 1, 2015, the maximum ratio was 2.00% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Opportunity Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	18.63		$	21.46		$	14.39		$	14.63		$	15.39
Income (Loss) from Investment Operations:
Net Investment Loss(3)		(0.08	)		(0.27	)		(0.29	)		(0.19	)		(0.13	)
Net Realized and Unrealized Gain (Loss)		4.64			(2.51	)		7.73			(0.05	)		(0.16	)
Total from Investment Operations		4.56			(2.78	)		7.44			(0.24	)		(0.29	)
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			—			(0.03	)
Net Realized Gain		—			(0.05	)		(0.37	)		—			(0.44	)
Total Distributions		—			(0.05	)		(0.37	)		—			(0.47	)
Redemption Fees		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	23.19		$	18.63		$	21.46		$	14.39		$	14.63
Total Return(5)		24.48	%(9)		(13.00	)%		51.77	%		(1.71	)%		(1.85	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	46,680		$	35,297		$	23,334		$	1,862		$	1,776
Ratio of Expenses Before Expense Limitation		2.02	%(10)		2.06	%		2.10	%		2.43	%		3.03	%(10)
Ratio of Expenses After Expense Limitation		2.01	%(6)(10)		2.04	%(6)		2.01	%(6)		2.10	%(6)		2.10	%(6)(7)(10)
Ratio of Net Investment Loss		(0.76	)%(6)(10)		(1.24	)%(6)		(1.45	)%(6)		(1.32	)%(6)		(1.28	)%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(10)		0.01	%		0.02	%		0.00	%(8)		0.01	%(10)
Portfolio Turnover Rate		13	%(9)		36	%		30	%		42	%		51	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(7)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.10% for Class C shares. Prior to July 1, 2015, the maximum ratio was 2.25% for Class C shares.

(8)  Amount is less than 0.005%.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Opportunity Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	19.79		$	22.54		$	14.94		$	15.03		$	13.92		$	13.77
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.03			0.02			(0.12	)		(0.03	)		0.02			0.07
Net Realized and Unrealized Gain (Loss)		4.93			(2.72	)		8.09			(0.06	)		1.56			0.37
Total from Investment Operations		4.96			(2.70	)		7.97			(0.09	)		1.58			0.44
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.00	)(3)		(0.03	)		(0.01	)
Net Realized Gain		—			(0.05	)		(0.37	)		—			(0.44	)		(0.28	)
Total Distributions		—			(0.05	)		(0.37	)		(0.00	)(3)		(0.47	)		(0.29	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	24.75		$	19.79		$	22.54		$	14.94		$	15.03		$	13.92
Total Return(4)		25.06	%(8)		(12.03	)%		53.41	%		(0.64	)%		11.40	%		3.22	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	14,626		$	14,016		$	57,629		$	1,030		$	12		$	11
Ratio of Expenses Before Expense Limitation		0.98	%(9)		0.95	%		1.03	%		5.64	%		15.79	%		20.64	%
Ratio of Expenses After Expense Limitation		0.93	%(5)(9)		0.92	%(5)		0.92	%(5)		0.93	%(5)		1.01	%(5)(6)		1.08	%(5)
Ratio of Net Investment Income (Loss)		0.27	%(5)(9)		0.09	%(5)		(0.56	)%(5)		(0.20	)%(5)		0.12	%(5)		0.51	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.02	%		0.02	%		0.01	%		0.00	%(7)		0.01	%
Portfolio Turnover Rate		13	%(8)		36	%		30	%		42	%		51	%		33	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2015, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.94% for Class IS shares. Prior to July 1, 2015, the maximum ratio was 1.09% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Opportunity Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	19.79		$	25.37
Income (Loss) from Investment Operations:
Net Investment Income Gain (Loss)(2)		0.04			(0.06	)
Net Realized and Unrealized Gain (Loss)		4.93			(5.47	)
Total from Investment Operations		4.97			(5.53	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(0.05	)
Redemption Fees		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	24.76		$	19.79
Total Return(4)		25.11	%(6)		(21.84	)%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	102,083		$	81,592
Ratio of Expenses Before Expense Limitation		0.92	%(7)		0.95	%(7)
Ratio of Expenses After Expense Limitation		0.91	%(5)(7)		0.93	%(5)(7)
Ratio of Net Investment Income (Loss)		0.32	%(5)(7)		(0.46	)%(5)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(7)		0.01	%(7)
Portfolio Turnover Rate		13	%(6)		36	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the International Opportunity Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015 the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if

there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) 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 its latest bid and ask prices. Unlisted options are valued at the

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) 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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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
Banks	$	—	$	91,449	$	—	$	91,449
Beverages		—		110,887		—		110,887
Biotechnology		—		33,848		—		33,848
Capital Markets		—		30,295		—		30,295
Diversified Consumer Services		109,808		—		—		109,808
Electronic Equipment, Instruments & Components		—		53,833		—		53,833
Entertainment		62,093		—		—		62,093
Food Products		—		90,539		—		90,539
Hotels, Restaurants & Leisure		30,859		21,558		—		52,417
Household Products		—		41,156		—		41,156
Information Technology Services		66,497		—		—		66,497
Interactive Media & Services		—		53,485		—		53,485
Internet & Direct Marketing Retail		144,647		85,630		—		230,277
Professional Services		—		30,073		—		30,073
Road & Rail		—		70,736		—		70,736
Semiconductors & Semiconductor Equipment		6,146		56,279		—		62,425
Software		27,143		9,313		—		36,456
Textiles, Apparel & Luxury Goods		—		203,300		—		203,300
Total Common Stocks		447,193		982,381		—		1,429,574
Call Options Purchased		—		1,485		—		1,485
Short-Term Investments
Investment Company		49,083		—		—		49,083
Repurchase Agreements		—		143		—		143
Total Short-Term Investments		49,083		143		—		49,226
Total Assets	$	496,276	$	984,009	$	—	$	1,480,285

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To

the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

unexpectedly, in which case, the Fund 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 in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund 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 Fund 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" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure		Value (000)
Purchased Options	Investments, at Value (Purchased Options)		Currency Risk	$	1,485	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative

contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(694	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(969	)(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	1,485	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) 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 Fund 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 Fund 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 potential 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

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

default in connection with one transaction between the Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	475		$	—	$	(475	)	$	0
Royal Bank of Scotland		1010			—		(1,010	)		0
Total	$	1,485	(a)	$	—	$	(1,485	)	$	0

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) 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, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Options Purchased:
Average monthly notional amount	710,813,000

6.  Securities Lending: The Fund 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 Fund. The Fund 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 Fund'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 Fund has the right under the securities 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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	10,842	(f)	$	—	$	(10,842	)(g)(h)	$	0

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

(g) The Fund received cash collateral of approximately $616,000, of which approximately $612,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2019, there was uninvested cash of approximately $4,000, which is not reflected in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $10,656,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

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

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations by

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2019:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	616	$	—	$	—	$	—	$	616
Total Borrowings	$	616	$	—	$	—	$	—	$	616
Gross amount of recognized liabilities for securities lending transactions									$	616

7.  Structured Investments: The Fund 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 Fund 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 Fund 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 Fund's illiquidity to the extent that the Fund, at a particular time, may be unable to find qualified buyers for these securities.

8.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares, Class IS shares and Class IR shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of

short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

10.  Dividends and Distributions to Shareholders: Dividends 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.

11.  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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $1 billion			Over $1 billion
	0.80	%		0.75	%

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

For the six months ended June 30, 2019, the advisory fee rate (net of rebate) was equivalent to an annual effective rate of 0.77% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares, 0.94% for Class IS shares and 0.94% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $43,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid

monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $345,032,000 and $158,382,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

ended June 30, 2019, advisory fees paid were reduced by approximately $72,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	25,200	$	261,798	$	237,915	$	836

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	49,083

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	608	$	1,906	$	385	$	8,635

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 in 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 a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)		Paid-in- Capital (000)
$	2,152	$	(2,152	)

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	484	$	26,320

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 45.7%.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund'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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's contractual management fee was higher than but close to its peer group average, the actual management fee was higher than its peer group average and the total expense ratio was lower than its peer group average. After discussion, the Board concluded that the Fund'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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

28

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

29

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

31

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIIIOSAN
2669034 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

International Real Estate Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	10
Notes to Financial Statements	15
Investment Advisory Agreement Approval	22
Privacy Notice	24
Director and Officer Information	26

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in International Real Estate Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

International Real Estate Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
International Real Estate Portfolio Class I	$	1,000.00	$	1,125.40	$	1,019.84	$	5.27	$	5.01		1.00	%
International Real Estate Portfolio Class A		1,000.00		1,122.90		1,018.10		7.11		6.76		1.35
International Real Estate Portfolio Class L		1,000.00		1,120.40		1,015.62		9.73		9.25		1.85
International Real Estate Portfolio Class C		1,000.00		1,118.90		1,014.38		11.03		10.49		2.10
International Real Estate Portfolio Class IS		1,000.00		1,125.40		1,019.98		5.11		4.86		0.97

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

International Real Estate Portfolio

	Shares		Value (000)
Common Stocks (97.6%)
Australia (9.4%)
Dexus REIT		34,588	$	316
Goodman Group REIT		38,294		405
GPT Group (The) REIT		66,201		286
Mirvac Group REIT		103,082		227
Scentre Group REIT		149,648		404
Stockland REIT		33,916		99
Vicinity Centres REIT		112,503		194
				1,931
Austria (0.3%)
Atrium European Real Estate Ltd. (a)		18,407		69
China (2.6%)
China Overseas Land & Investment Ltd. (b)		62,000		229
China Resources Land Ltd. (b)		30,000		132
Guangzhou R&F Properties Co., Ltd. H Shares (b)		18,400		35
Longfor Group Holdings Ltd. (b)		36,000		136
				532
Finland (0.4%)
Kojamo Oyj		5,613		84
France (10.4%)
Carmila SA REIT		3,664		65
Covivio REIT		1,494		156
Gecina SA REIT		2,758		413
ICADE REIT		1,623		149
Klepierre SA REIT		14,731		494
Mercialys SA REIT		11,274		149
Unibail-Rodamco-Westfield REIT		4,739		710
				2,136
Germany (6.4%)
ADO Properties SA		1,638		68
Alstria Office AG REIT		8,601		139
Deutsche EuroShop AG		748		21
Deutsche Wohnen SE		10,374		380
LEG Immobilien AG		768		87
Vonovia SE		13,065		624
				1,319
Hong Kong (24.0%)
Champion REIT		108,000		90
CK Asset Holdings Ltd.		44,500		347
Hongkong Land Holdings Ltd.		114,600		739
Hysan Development Co., Ltd.		25,836		134
Link REIT		96,895		1,192
New World Development Co., Ltd.		138,788		216
Sino Land Co., Ltd.		108,795		182
Sun Hung Kai Properties Ltd.		60,956		1,035
Swire Properties Ltd.		149,700		605
Wharf Holdings Ltd. (The)		22,117		58
Wharf Real Estate Investment Co., Ltd.		47,370		333
				4,931

	Shares		Value (000)
Ireland (0.8%)
Green REIT PLC		20,589	$	42
Hibernia REIT PLC		79,335		131
				173
Japan (23.2%)
Activia Properties, Inc. REIT		19		83
Advance Residence Investment Corp. REIT		48		143
Frontier Real Estate Investment Corp. REIT		13		56
GLP J-REIT		139		158
Hulic Co., Ltd.		6,600		53
Hulic REIT, Inc.		18		31
Invincible Investment Corp. REIT		43		22
Japan Excellent, Inc. REIT		14		21
Japan Hotel REIT Investment Corp.		179		144
Japan Real Estate Investment Corp. REIT		62		377
Japan Retail Fund Investment Corp. REIT		105		212
Kenedix Office Investment Corp. REIT		9		65
Mitsubishi Estate Co., Ltd.		45,200		843
Mitsui Fudosan Co., Ltd.		32,300		784
Mori Trust Sogo Reit, Inc.		40		65
Nippon Building Fund, Inc. REIT		75		514
Nippon Prologis, Inc. REIT		36		83
Nomura Real Estate Master Fund, Inc. REIT		157		241
Orix, Inc. J-REIT		33		60
Premier Investment Corp. REIT		55		72
Sumitomo Realty & Development Co., Ltd.		14,600		522
Tokyo Tatemono Co., Ltd.		600		7
United Urban Investment Corp. REIT		126		211
				4,767
Malta (0.0%)
BGP Holdings PLC (a)(c)(d)		4,769,371		7
Netherlands (1.6%)
Eurocommercial Properties N.V. CVA REIT		8,502		227
NSI N.V. REIT		1,164		49
Wereldhave N.V. REIT		1,730		46
				322
Norway (0.9%)
Entra ASA		10,574		162
Norwegian Property ASA		16,770		24
				186
Singapore (2.6%)
Ascendas Real Estate Investment Trust REIT		65,900		152
CapitaLand Commercial Trust REIT		52,160		84
CapitaLand Ltd.		5,100		13
CapitaLand Mall Trust REIT		75,000		146
Mapletree Logistics Trust REIT		41,300		49
Suntec Real Estate Investment Trust REIT		21,600		31
UOL Group Ltd.		8,813		49
				524

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

International Real Estate Portfolio

	Shares		Value (000)
Spain (2.6%)
Inmobiliaria Colonial Socimi SA REIT		15,029	$	167
Merlin Properties Socimi SA REIT		27,102		376
				543
Sweden (1.7%)
Atrium Ljungberg AB, Class B		4,275		77
Castellum AB		2,865		55
Hufvudstaden AB, Class A		8,972		153
Kungsleden AB		7,050		58
				343
Switzerland (0.5%)
PSP Swiss Property AG (Registered)		939		110
United Kingdom (10.2%)
British Land Co., PLC (The) REIT		70,081		479
Capital & Counties Properties PLC		22,084		61
Derwent London PLC REIT		3,477		138
Grainger PLC		20,796		65
Great Portland Estates PLC REIT		14,195		123
Hammerson PLC REIT		56,185		198
Intu Properties PLC REIT		32,675		32
Land Securities Group PLC REIT		49,978		529
LXB Retail Properties PLC (a)		102,398		—	@
Segro PLC REIT		15,035		139
Shaftesbury PLC REIT		2,056		21
St. Modwen Properties PLC		22,385		125
Urban & Civic PLC		40,412		170
Workspace Group PLC REIT		797		9
				2,089
Total Common Stocks (Cost $16,629)				20,066
Short-Term Investment (1.4%)
Investment Company (1.4%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $287)		287,480		287
Total Investments (99.0%) (Cost $16,916) (e)(f)				20,353
Other Assets in Excess of Liabilities (1.0%)				206
Net Assets (100.0%)			$	20,559

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  At June 30, 2019, the Fund held a fair valued security valued at approximately $7,000, representing less than 0.05% 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 Company's (as defined herein) Directors.

(d)  Security has been deemed illiquid at June 30, 2019.

(e)  The approximate fair value and percentage of net assets, $20,059,000 and 97.6%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(f)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $4,515,000 and the aggregate gross unrealized depreciation is approximately $1,078,000, resulting in net unrealized appreciation of approximately $3,437,000.

@  Value is less than $500.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Diversified		46.1	%
Retail		20.7
Office		16.7
Residential		8.9
Other*		7.6
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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $16,629)	$	20,066
Investment in Security of Affiliated Issuer, at Value (Cost $287)		287
Total Investments in Securities, at Value (Cost $16,916)		20,353
Foreign Currency, at Value (Cost $57)		57
Dividends Receivable		92
Receivable for Investments Sold		26
Due from Adviser		25
Tax Reclaim Receivable		22
Receivable from Affiliate		—	@
Other Assets		62
Total Assets		20,637
Liabilities:
Payable for Professional Fees		48
Payable for Custodian Fees		9
Payable for Investments Purchased		9
Payable for Sub Transfer Agency Fees — Class I		2
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class I		1
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class L		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Administration Fees		1
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class L		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		8
Total Liabilities		78
Net Assets	$	20,559
Net Assets Consist of:
Paid-in-Capital	$	243,778
Total Accumulated Loss		(223,219	)
Net Assets	$	20,559

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Real Estate Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	9,760
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		510,477
Net Asset Value, Offering and Redemption Price Per Share	$	19.12
CLASS A:
Net Assets	$	1,208
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		63,255
Net Asset Value, Redemption Price Per Share	$	19.10
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	1.06
Maximum Offering Price Per Share	$	20.16
CLASS L:
Net Assets	$	11
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		578
Net Asset Value, Offering and Redemption Price Per Share	$	18.98
CLASS C:
Net Assets	$	9
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		470
Net Asset Value, Offering and Redemption Price Per Share	$	18.92
CLASS IS:
Net Assets	$	9,571
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		500,947
Net Asset Value, Offering and Redemption Price Per Share	$	19.11

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

International Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $35 of Foreign Taxes Withheld)	$	401
Dividends from Security of Affiliated Issuer (Note G)		3
Non-Cash Dividends from Securities of Unaffiliated Issuers		23
Total Investment Income		427
Expenses:
Advisory Fees (Note B)		88
Professional Fees		48
Custodian Fees (Note F)		38
Registration Fees		25
Shareholder Reporting Fees		9
Administration Fees (Note C)		9
Sub Transfer Agency Fees — Class I		6
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class C		—	@
Transfer Agency Fees — Class I (Note E)		2
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		3
Pricing Fees		3
Shareholder Services Fees — Class A (Note D)		2
Distribution and Shareholder Services Fees — Class L (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		5
Expenses Before Non Operating Expenses		243
Bank Overdraft Expense		3
Total Expenses		246
Waiver of Advisory Fees (Note B)		(88	)
Expenses Reimbursed by Adviser (Note B)		(34	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(6	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		114
Net Investment Income		313
Realized Gain:
Investments Sold		536
Foreign Currency Translation		1
Net Realized Gain		537
Change in Unrealized Appreciation (Depreciation):
Investments		1,926
Foreign Currency Translation		(1	)
Net Change in Unrealized Appreciation (Depreciation)		1,925
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		2,462
Net Increase in Net Assets Resulting from Operations	$	2,775

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

International Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	313		$	807
Net Realized Gain		537			1,074
Net Change in Unrealized Appreciation (Depreciation)		1,925			(4,143	)
Net Increase (Decrease) in Net Assets Resulting from Operations		2,775			(2,262	)
Dividends and Distributions to Shareholders:
Class I		—			(702	)
Class A		—			(67	)
Class L		—			—	@
Class C		—			(2	)
Class IS		—			(452	)
Total Dividends and Distributions to Shareholders		—			(1,223	)
Capital Share Transactions:(1)
Class I:
Subscribed		392			322
Distributions Reinvested		—			699
Redeemed		(5,444	)		(5,620	)
Class A:
Subscribed		6			9
Distributions Reinvested		—			59
Redeemed		(393	)		(359	)
Class C:
Distributions Reinvested		—			2
Redeemed		—			(117	)
Class IS:
Distributions Reinvested		—			452
Redeemed		—			(2,000	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(5,439	)		(6,553	)
Total Decrease in Net Assets		(2,664	)		(10,038	)
Net Assets:
Beginning of Period		23,223			33,261
End of Period	$	20,559		$	23,223
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		21			17
Shares Issued on Distributions Reinvested		—			38
Shares Redeemed		(292	)		(299	)
Net Decrease in Class I Shares Outstanding		(271	)		(244	)
Class A:
Shares Subscribed		—	@@		1
Shares Issued on Distributions Reinvested		—			3
Shares Redeemed		(20	)		(19	)
Net Decrease in Class A Shares Outstanding		(20	)		(15	)
Class C:
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		—			(6	)
Net Decrease in Class C Shares Outstanding		—			(6	)
Class IS:
Shares Issued on Distributions Reinvested		—			25
Shares Redeemed		—			(111	)
Net Decrease in Class IS Shares Outstanding		—			(86	)

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Real Estate Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	16.99		$	19.36		$	17.53		$	18.72		$	19.84		$	19.99
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.25			0.52			0.59			0.46			0.37			0.39
Net Realized and Unrealized Gain (Loss)		1.88			(2.05	)		2.69			(0.73	)		(1.00	)		(0.07	)
Total from Investment Operations		2.13			(1.53	)		3.28			(0.27	)		(0.63	)		0.32
Distributions from and/or in Excess of:
Net Investment Income		—			(0.84	)		(1.45	)		(0.92	)		(0.49	)		(0.47	)
Redemption Fees		—			—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	19.12		$	16.99		$	19.36		$	17.53		$	18.72		$	19.84
Total Return(4)		12.54	%(8)		(8.14	)%		19.13	%		(1.38	)%		(3.29	)%		1.61	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9,760		$	13,276		$	19,846		$	26,213		$	67,459		$	94,269
Ratio of Expenses Before Expense Limitation		2.21	%(9)		1.90	%		1.76	%		1.37	%		1.29	%		1.16	%
Ratio of Expenses After Expense Limitation		1.02	%(5)(7)(9)		1.00	%(5)		1.00	%(5)		1.00	%(5)		1.00	%(5)		1.00	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.00	%(5)(9)		N/A			1.00	%(5)		N/A			N/A			N/A
Ratio of Net Investment Income		2.74	%(5)(9)		2.74	%(5)		3.13	%(5)		2.47	%(5)		1.84	%(5)		1.91	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(9)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(8)		28	%		23	%		21	%		37	%		59	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Real Estate Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	17.01		$	19.37		$	17.54		$	18.73		$	19.84		$	19.98
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.23			0.45			0.51			0.39			0.30			0.31
Net Realized and Unrealized Gain (Loss)		1.86			(2.04	)		2.71			(0.73	)		(1.00	)		(0.06	)
Total from Investment Operations		2.09			(1.59	)		3.22			(0.34	)		(0.70	)		0.25
Distributions from and/or in Excess of:
Net Investment Income		—			(0.77	)		(1.39	)		(0.85	)		(0.41	)		(0.39	)
Redemption Fees		—			—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	19.10		$	17.01		$	19.37		$	17.54		$	18.73		$	19.84
Total Return(4)		12.29	%(8)		(8.45	)%		18.78	%		(1.78	)%		(3.61	)%		1.27	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,208		$	1,422		$	1,917		$	1,512		$	2,308		$	2,792
Ratio of Expenses Before Expense Limitation		2.57	%(9)		2.22	%		2.23	%		1.85	%		1.70	%		1.58	%
Ratio of Expenses After Expense Limitation		1.37	%(5)(7)(9)		1.35	%(5)		1.35	%(5)		1.35	%(5)		1.35	%(5)		1.35	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.35	%(5)(9)		N/A			1.35	%(5)		N/A			N/A			N/A
Ratio of Net Investment Income		2.51	%(5)(9)		2.40	%(5)		2.71	%(5)		2.10	%(5)		1.48	%(5)		1.55	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(9)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(8)		28	%		23	%		21	%		37	%		59	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Real Estate Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	16.94		$	19.29		$	17.42		$	18.61		$	19.69		$	19.86
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.20			0.36			0.50			0.29			0.18			0.21
Net Realized and Unrealized Gain (Loss)		1.84			(2.03	)		2.59			(0.71	)		(0.97	)		(0.06	)
Total from Investment Operations		2.04			(1.67	)		3.09			(0.42	)		(0.79	)		0.15
Distributions from and/or in Excess of:
Net Investment Income		—			(0.68	)		(1.22	)		(0.77	)		(0.29	)		(0.32	)
Redemption Fees		—			—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	18.98		$	16.94		$	19.29		$	17.42		$	18.61		$	19.69
Total Return(4)		12.04	%(8)		(8.88	)%		18.14	%		(2.23	)%		(4.11	)%		0.75	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11		$	10		$	11		$	53		$	55		$	95
Ratio of Expenses Before Expense Limitation		17.66	%(9)		20.23	%		14.81	%		5.51	%		4.58	%		3.90	%
Ratio of Expenses After Expense Limitation		1.87	%(5)(7)(9)		1.85	%(5)		1.85	%(5)		1.85	%(5)		1.85	%(5)		1.85	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		1.85	%(5)(9)		N/A			1.85	%(5)		N/A			N/A			N/A
Ratio of Net Investment Income		2.13	%(5)(9)		1.90	%(5)		2.70	%(5)		1.58	%(5)		0.90	%(5)		1.05	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(9)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(8)		28	%		23	%		21	%		37	%		59	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Real Estate Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	16.91		$	19.00		$	17.32		$	18.50		$	21.28
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.17			0.35			0.30			0.25			0.06
Net Realized and Unrealized Gain (Loss)		1.84			(2.04	)		2.71			(0.71	)		(2.48	)
Total from Investment Operations		2.01			(1.69	)		3.01			(0.46	)		(2.42	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.40	)		(1.33	)		(0.72	)		(0.36	)
Redemption Fees		—			—			0.00	(4)		0.00	(4)		0.00	(4)
Net Asset Value, End of Period	$	18.92		$	16.91		$	19.00		$	17.32		$	18.50
Total Return(5)		11.89	%(9)		(9.11	)%		17.78	%		(2.44	)%		(11.47	)%(9)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9		$	8		$	128		$	21		$	22
Ratio of Expenses Before Expense Limitation		23.96	%(10)		5.51	%		5.62	%		12.39	%		10.98	%(10)
Ratio of Expenses After Expense Limitation		2.12	%(6)(8)(10)		2.10	%(6)		2.10	%(6)		2.10	%(6)		2.10	%(6)(10)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		2.10	%(6)(10)		N/A			2.10	%(6)		N/A			N/A
Ratio of Net Investment Income		1.88	%(6)(10)		1.84	%(6)		1.58	%(6)		1.33	%(6)		0.45	%(6)(10)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(10)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(10)
Portfolio Turnover Rate		15	%(9)		28	%		23	%		21	%		37	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(7)  Amount is less than 0.005%.

(8)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(9)  Not annualized.

(10)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

International Real Estate Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	16.98		$	19.35		$	17.52		$	18.71		$	19.83		$	19.99
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.28			0.52			0.59			0.47			0.37			0.23
Net Realized and Unrealized Gain (Loss)		1.85			(2.04	)		2.70			(0.73	)		(1.00	)		0.09
Total from Investment Operations		2.13			(1.52	)		3.29			(0.26	)		(0.63	)		0.32
Distributions from and/or in Excess of:
Net Investment Income		—			(0.85	)		(1.46	)		(0.93	)		(0.49	)		(0.48	)
Redemption Fees		—			—			0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	19.11		$	16.98		$	19.35		$	17.52		$	18.71		$	19.83
Total Return(4)		12.54	%(8)		(8.11	)%		19.19	%		(1.33	)%		(3.26	)%		1.60	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9,571		$	8,507		$	11,359		$	11,573		$	20,944		$	2,557
Ratio of Expenses Before Expense Limitation		2.10	%(9)		1.81	%		1.70	%		1.33	%		1.30	%		1.13	%
Ratio of Expenses After Expense Limitation		0.99	%(5)(7)(9)		0.97	%(5)		0.97	%(5)		0.97	%(5)		0.97	%(5)		0.97	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		0.97	%(5)(9)		N/A			0.97	%(5)		N/A			N/A			N/A
Ratio of Net Investment Income		3.02	%(5)(9)		2.76	%(5)		3.11	%(5)		2.52	%(5)		1.86	%(5)		1.14	%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(9)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		15	%(8)		28	%		23	%		21	%		37	%		59	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Ratio is above the expense limitation due to non-operating expenses, which are not included in the determination of the expense limitation. Refer to Footnote B in the Notes to the Financial Statements.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the International Real Estate Portfolio. The Fund seeks to provide current income and long-term capital appreciation.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if

there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), determine that the closing

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Fund invests a significant portion of its assets in securities of real estate investment trusts ("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 Fund.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	—	$	9,370	$	—	$	9,370
Industrial		—		834		—		834
Industrial/Office Mixed		—		265		—		265
Lodging/Resorts		—		166		—		166
Office		—		3,397		—		3,397
Residential		—		1,812		7		1,819
Retail		—		4,215		—		4,215
Total Common Stocks		—		20,059		7		20,066
Short-Term Investment
Investment Company		287		—		—		287
Total Assets	$	287	$	20,059	$	7	$	20,353

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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

	Common Stock (000)
Beginning Balance	$	5
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		2
Realized gains (losses)		—
Ending Balance	$	7
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2019	$	2

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, 2019. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance.

	Fair Value at June 30, 2019 (000)		Valuation Technique	Unobservable Input	Amount*			Impact to Valuation from an increase in input**
Common Stock	$	7	Market Transaction Method	Transaction Valuation	$	0.001		Increase
				Discount for Lack of Marketability		50.0	%	Decrease

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the

foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Non-cash dividends received in the form of stock, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund 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.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Agreement, paid quarterly, at an annual rate of 0.80% of the daily net assets of the Fund.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares and 0.97% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $88,000 of advisory fees were waived and approximately $44,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

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

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Fund has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly,

at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $3,333,000 and $8,855,000, respectively. There were no purchases and sales of long-term

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

U.S. Government securities for the six months ended June 30, 2019.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	36	$	2,025	$	1,774	$	3

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	287

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,223	$	—	$	2,776	$	—

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

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Permanent differences, primarily due to an expired capital loss carryforward, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)		Paid-in- Capital (000)
$	66,872	$	(66,872	)

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	192	$	—

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $3,185,000 and $220,914,000, respectively that do not have an expiration date.

During the year ended December 31, 2018, capital loss carryforwards of approximately $66,872,000 expired for federal income tax purposes.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Company had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Company. The aggregate percentage of such owners was 77.6%.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Advisers and Administrator 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 considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below 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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

23

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

24

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

25

Morgan Stanley Institutional Fund Trust

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

26

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIIRESAN
2669006 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Multi-Asset Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Consolidated Expense Example	3
Consolidated Portfolio of Investments	4
Consolidated Statement of Assets and Liabilities	13
Consolidated Statement of Operations	15
Consolidated Statements of Changes in Net Assets	16
Consolidated Financial Highlights	17
Notes to Consolidated Financial Statements	22
Investment Advisory Agreement Approval	33
Privacy Notice	35
Director and Officer Information	37

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Multi-Asset Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Consolidated Expense Example (unaudited)

Multi-Asset Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Multi-Asset Portfolio Class I	$	1,000.00	$	1,005.30	$	1,019.49	$	5.32	$	5.36		1.07	%
Multi-Asset Portfolio Class A		1,000.00		1,003.20		1,017.75		7.05		7.10		1.42
Multi-Asset Portfolio Class L		1,000.00		1,001.10		1,015.27		9.53		9.59		1.92
Multi-Asset Portfolio Class C		1,000.00		1,000.00		1,014.03		10.76		10.84		2.17
Multi-Asset Portfolio Class IS		1,000.00		1,005.40		1,019.64		5.17		5.21		1.04

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Consolidated Portfolio of Investments

Multi-Asset Portfolio

	Shares		Value (000)
Common Stocks (31.1%)
Australia (0.1%)
AGL Energy Ltd.		172	$	3
APA Group		311		3
Bendigo & Adelaide Bank Ltd.		3		—	@
Coles Group Ltd. (a)		107		1
CSL Ltd.		28		4
Goodman Group REIT		33		—	@
Stockland REIT		70		—	@
Telstra Corp., Ltd.		1,215		3
Woolworths Group Ltd.		124		3
				17
Austria (0.0%)
Erste Group Bank AG (a)		96		4
Raiffeisen Bank International AG		42		1
				5
Belgium (0.5%)
Anheuser-Busch InBev SA N.V.		71		6
bpost SA		7,015		67
Cie d'Entreprises CFE		90		9
D'ieteren SA		237		11
Econocom Group SA		4,011		14
KBC Group N.V.		82		5
Proximus SADP		56		2
				114
Canada (1.9%)
Bank of Montreal		100		7
Bank of Nova Scotia (The)		500		27
Canadian Imperial Bank of Commerce		100		8
Enbridge, Inc.		3,200		115
Fortis, Inc.		100		4
Gibson Energy, Inc.		500		9
Hydro One Ltd.		100		2
Inter Pipeline Ltd.		1,100		17
Keyera Corp.		700		18
Kinder Morgan Canada Ltd.		100		1
National Bank of Canada		100		5
Pembina Pipeline Corp.		1,500		56
Rogers Communications, Inc., Class B		100		5
Royal Bank of Canada		500		40
TC Energy Corp.		2,700		134
Tidewater Midstream and Infrastructure Ltd.		500		1
Toronto-Dominion Bank (The)		600		35
				484
China (0.0%)
China Common Rich Renewable Energy Investments Ltd. (a)		178,000		1
Denmark (0.1%)
Carlsberg A/S Series B		14		2
Danske Bank A/S		254		4

	Shares		Value (000)
Novo Nordisk A/S Series B		108	$	5
Orsted A/S		43		4
				15
Finland (0.0%)
Elisa Oyj		50		2
Fortum Oyj		116		3
				5
France (7.0%)
Aeroports de Paris (ADP)		741		131
Akka Technologies		253		18
ALD SA		1,207		19
Alten SA		639		77
Altran Technologies SA		5,068		80
BNP Paribas SA		373		18
Carrefour SA		57		1
Credit Agricole SA		445		5
Danone SA		58		5
Derichebourg SA		5,720		22
Eiffage SA		1,435		142
Electricite de France SA		179		2
Elior Group SA		4,123		57
Engie SA		433		6
Fnac Darty SA (a)		676		50
Iliad SA		8		1
Jacquet Metal Service SA		393		8
Kaufman & Broad SA		381		15
L'Oreal SA		22		6
Orange SA		584		9
Pernod Ricard SA		21		4
Peugeot SA		11,056		272
Sanofi		67		6
Societe Generale SA		264		7
Suez		110		2
Veolia Environnement SA		129		3
Vinci SA		6,388		655
Worldline SA (a)		1,823		133
				1,754
Germany (3.2%)
Amadeus Fire AG		71		10
Aumann AG		635		13
Bayer AG (Registered)		57		4
Bechtle AG		835		96
Befesa SA		383		15
Beiersdorf AG		9		1
Bilfinger SE		1,637		53
CANCOM SE		1,152		61
Commerzbank AG		402		3
Deutsche Telekom AG (Registered)		975		17
E.ON SE		520		6
Fraport AG Frankfurt Airport Services Worldwide		1,368		118
Fresenius Medical Care AG & Co., KGaA		12		1
Fresenius SE & Co., KGaA		34		2

The accompanying notes are an integral part of the consolidated financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

	Shares		Value (000)
Germany (cont'd)
Hamburger Hafen und Logistik AG		658	$	17
Henkel AG & Co., KGaA		12		1
Henkel AG & Co., KGaA (Preference)		21		2
Hornbach Holding AG & Co., KGaA		152		9
Indus Holding AG		254		11
Innogy SE		43		2
Jungheinrich AG (Preference)		928		29
Merck KGaA		8		1
RWE AG		124		3
Salzgitter AG		2,103		60
Sixt SE		519		56
Uniper SE		59		2
United Internet AG (Registered)		45		1
Wacker Neuson SE		875		22
Washtec AG		80		5
Zalando SE (a)		3,839		170
				791
Greece (0.3%)
Mytilineos Holdings SA		1,810		21
OPAP SA		3,897		44
				65
Hong Kong (0.1%)
Bank of East Asia Ltd. (The)		416		1
BOC Hong Kong Holdings Ltd.		2,500		10
CLP Holdings Ltd.		500		5
Hang Seng Bank Ltd.		200		5
HKT Trust & HKT Ltd.		1,000		2
Hong Kong & China Gas Co., Ltd.		5,500		12
				35
Ireland (0.0%)
AIB Group PLC		343		1
Bank of Ireland Group PLC		467		3
Kerry Group PLC, Class A		19		2
				6
Israel (0.1%)
Bank Hapoalim BM		723		5
Bank Leumi Le-Israel BM		1,037		8
Mizrahi Tefahot Bank Ltd.		60		1
				14
Italy (1.5%)
Atlantia SpA		8,303		216
CIR-Compagnie Industriali Riunite SpA		5,053		5
Enav SpA		6,483		37
Enel SpA		1,925		14
Fiera Milano SpA		1,906		8
Geox SpA		6,985		10
Intesa Sanpaolo SpA		10,558		23
Mediobanca Banca di Credito Finanziario SpA		237		2
Societa Iniziative Autostradali e Servizi SpA		2,418		45
Telecom Italia SpA (a)		4,155		2

	Shares		Value (000)
Telecom Italia SpA		1,817	$	1
Terna Rete Elettrica Nazionale SpA		373		2
UniCredit SpA		771		10
				375
Japan (5.0%)
Astellas Pharma, Inc.		100		1
Chiba Bank Ltd. (The)		200		1
Chubu Electric Power Co., Inc.		100		1
Chugoku Electric Power Co., Inc. (The)		100		1
Concordia Financial Group Ltd.		600		2
Japan Post Bank Co., Ltd.		100		1
Japan Tobacco, Inc.		100		2
Kansai Electric Power Co., Inc. (The)		100		1
KDDI Corp.		900		23
Kirin Holdings Co., Ltd.		100		2
Kyushu Electric Power Co., Inc.		100		1
Mebuki Financial Group, Inc.		600		2
Mitsubishi Estate Co., Ltd.		14,600		272
Mitsui Fudosan Co., Ltd.		13,000		316
Mizuho Financial Group, Inc.		22,500		33
Nippon Telegraph & Telephone Corp.		500		23
Nomura Real Estate Holdings, Inc.		2,400		52
NTT DOCOMO, Inc.		600		14
Osaka Gas Co., Ltd.		100		2
Resona Holdings, Inc.		1,300		5
Seven Bank Ltd.		500		1
Shizuoka Bank Ltd. (The)		100		1
Softbank Corp.		900		12
SoftBank Group Corp.		1,000		48
Sumitomo Mitsui Financial Group, Inc.		500		18
Sumitomo Mitsui Trust Holdings, Inc.		100		4
Sumitomo Realty & Development Co., Ltd.		7,100		254
Takeda Pharmaceutical Co., Ltd.		100		4
Tohoku Electric Power Co., Inc.		100		1
Tokyo Electric Power Co., Holdings, Inc. (a)		500		3
Tokyo Gas Co., Ltd.		100		2
Tokyo Tatemono Co., Ltd.		6,100		68
Tokyu Fudosan Holdings Corp.		12,900		71
				1,242
Netherlands (1.3%)
ABN AMRO Bank N.V. CVA		155		3
Accell Group N.V.		272		7
Basic-Fit N.V. (a)		640		23
Heineken Holding N.V.		12		1
Heineken N.V.		25		3
ING Groep N.V.		1,502		17
InterXion Holding N.V. (a)		1,200		91
Koninklijke Ahold Delhaize N.V.		116		3
Koninklijke KPN N.V.		985		3
Koninklijke Philips N.V.		66		3
PostNL N.V.		18,643		32
Takeaway.com (a)		905		85

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

	Shares		Value (000)
Netherlands (cont'd)
TomTom N.V. (a)		3,111	$	36
Unilever N.V. CVA		143		9
				316
New Zealand (0.0%)
Spark New Zealand Ltd.		668		2
Norway (0.0%)
DNB ASA		349		6
Marine Harvest ASA (a)		40		1
Telenor ASA		214		5
				12
Portugal (0.2%)
CTT-Correios de Portugal SA		3,667		9
EDP — Energias de Portugal SA		677		2
Navigator Co. SA (The)		7,887		30
Semapa-Sociedade de Investimento e Gestao		409		6
				47
Singapore (0.2%)
DBS Group Holdings Ltd.		800		15
Oversea-Chinese Banking Corp., Ltd.		1,400		12
Singapore Telecommunications Ltd.		2,500		6
United Overseas Bank Ltd.		500		10
				43
Spain (2.0%)
Aena SME SA		1,608		319
Banco Bilbao Vizcaya Argentaria SA		3,150		17
Banco de Sabadell SA		6,571		7
Banco Santander SA		8,365		39
Bankia SA		723		2
Bankinter SA		272		2
CaixaBank SA		2,112		6
Cia de Distribucion Integral Logista Holdings SA		1,483		34
Ence Energia y Celulosa SA		7,267		33
Endesa SA		84		2
Iberdrola SA		1,472		15
Naturgy Energy Group SA		93		2
NH Hotel Group SA		1,138		6
Red Electrica Corp., SA		116		2
Telefonica SA		1,365		11
Telepizza Group SA		221		1
				498
Sweden (0.1%)
Essity AB, Class B		70		2
Millicom International Cellular SA SDR		21		1
Nordea Bank Abp		1,278		9
Skandinaviska Enskilda Banken AB, Class A		654		6
Svenska Handelsbanken AB, Class A		602		6
Swedbank AB, Class A		332		5
Tele2 AB, Class B		161		3
Telia Co., AB		811		4
				36

	Shares		Value (000)
Switzerland (0.3%)
Alcon, Inc. (a)		29	$	2
Lonza Group AG (Registered) (a)		9		3
Nestle SA (Registered)		287		30
Novartis AG (Registered)		132		12
Roche Holding AG (Genusschein)		43		12
Swisscom AG (Registered)		9		4
				63
Turkey (0.7%)
Akbank T.A.S. (a)		62,515		73
Turkiye Garanti Bankasi AS (a)		50,658		80
Turkiye Is Bankasi A/S Series C (a)		29,971		31
				184
United Kingdom (1.1%)
Associated British Foods PLC		36		1
AstraZeneca PLC		77		6
Barclays PLC		13,114		25
British American Tobacco PLC		214		7
BT Group PLC		2,465		6
Centrica PLC		1,664		2
Diageo PLC		228		10
GlaxoSmithKline PLC		301		6
HSBC Holdings PLC		8,620		72
Imperial Brands PLC		99		2
Lloyds Banking Group PLC		105,655		76
National Grid PLC		802		9
Reckitt Benckiser Group PLC		63		5
Royal Bank of Scotland Group PLC		2,857		8
Severn Trent PLC		70		2
Smith & Nephew PLC		54		1
SSE PLC		239		3
Standard Chartered PLC		1,217		11
Tesco PLC		911		3
Unilever PLC		105		7
United Utilities Group PLC		202		2
Vodafone Group PLC		7,812		13
				277
United States (5.4%)
Abbott Laboratories		100		8
AbbVie, Inc.		100		7
AES Corp.		100		2
Altria Group, Inc.		100		5
American Electric Power Co., Inc.		100		9
AT&T, Inc.		2,100		70
Bank of America Corp.		3,200		93
BB&T Corp.		200		10
Boston Scientific Corp. (a)		100		4
Bristol-Myers Squibb Co.		100		4
CenterPoint Energy, Inc.		100		3
CenturyLink, Inc.		500		6
Cheniere Energy, Inc. (a)		800		55
Citigroup, Inc.		800		56

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

	Shares		Value (000)
United States (cont'd)
Citizens Financial Group, Inc.		100	$	4
Coca-Cola Co. (The)		600		31
CVS Health Corp.		100		5
Dominion Energy, Inc.		100		8
Duke Energy Corp.		100		9
Edison International		100		7
Exelon Corp.		500		24
Fifth Third Bancorp		100		3
FirstEnergy Corp.		100		4
Gilead Sciences, Inc.		100		7
Huntington Bancshares, Inc.		500		7
Johnson & Johnson		100		14
JPMorgan Chase & Co.		1,300		145
KeyCorp		200		4
Kinder Morgan, Inc.		5,700		119
Kroger Co. (The)		100		2
Macquarie Infrastructure Corp.		300		12
Medtronic PLC		100		10
Merck & Co., Inc.		100		8
Mondelez International, Inc., Class A		100		5
NextEra Energy, Inc.		100		20
NiSource, Inc.		100		3
ONEOK, Inc.		1,100		76
People's United Financial, Inc.		100		2
PepsiCo, Inc.		100		13
Pfizer, Inc.		600		26
Philip Morris International, Inc.		100		8
PNC Financial Services Group, Inc. (The)		100		14
PPL Corp.		100		3
Procter & Gamble Co. (The)		500		55
Public Service Enterprise Group, Inc.		100		6
Regions Financial Corp.		200		3
SemGroup Corp., Class A		300		4
Southern Co. (The)		500		28
Sprint Corp. (a)		500		3
SunTrust Banks, Inc.		100		6
T-Mobile US, Inc. (a)		100		7
Targa Resources Corp.		700		27
Tellurian, Inc. (a)		200		2
US Bancorp		500		26
Verizon Communications, Inc.		1,300		74
Vistra Energy Corp.		100		2
Walgreens Boots Alliance, Inc.		100		5
Walmart, Inc.		100		11
Wells Fargo & Co.		1,500		71
Williams Cos., Inc. (The)		3,500		98
Xcel Energy, Inc.		100		6
				1,359
Total Common Stocks (Cost $7,576)				7,760

	Face Amount (000)		Value (000)
Fixed Income Securities (9.7%)
Sovereign (9.7%)
Argentina (2.5%)
Argentine Republic Government
International Bond, 5.88%, 1/11/28	$	815	$	622
Greece (7.2%)
Hellenic Republic Government Bond,
3.75%, 1/30/28	EUR	1,427		1,804
Total Sovereign (Cost $2,252)				2,426
Total Fixed Income Securities (Cost $2,252)				2,426
	Shares
Short-Term Investments (57.2%)
Investment Company (23.5%)
Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note G) (Cost $5,861)		5,860,752		5,861
	Face Amount (000)
U.S. Treasury Security (33.7%)
U.S. Treasury Bill,
2.35%, 11/21/19 (Cost $8,408) (b)(c)	$	8,486		8,417
Total Short-Term Investments (Cost $14,269)				14,278
Total Investments (98.0%) (Cost $24,097) (d)(e)(f)				24,464
Other Assets in Excess of Liabilities (2.0%)				500
Net Assets (100.0%)			$	24,964

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Rate shown is the yield to maturity at June 30, 2019.

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

(d)  The approximate fair value and percentage of net assets, $5,826,000 and 23.3%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Consolidated Financial Statements.

(e)  Securities are available for collateral in connection with open foreign currency forward exchange contracts, futures contracts and swap agreements.

(f)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $1,065,000 and the aggregate gross unrealized depreciation is approximately $1,380,000, resulting in net unrealized depreciation of approximately $315,000.

@  Value is less than $500.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

SDR  Swedish Depositary Receipt.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Foreign Currency Forward Exchange Contracts:

The Fund had the following foreign currency forward exchange contracts open at June 30, 2019:

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
BNP Paribas SA	$	22	ARS	1,108	7/18/19	$	3
Goldman Sachs International	ARS	7,629	$	172	7/18/19		(3	)
Goldman Sachs International	ARS	8,176	$	178	7/18/19		(10	)
Goldman Sachs International	ARS	17,372	$	377	7/18/19		(22	)
Goldman Sachs International	ARS	12,822	$	247	7/18/19		(48	)
Goldman Sachs International	ARS	3,344	$	77	7/18/19		(—	@)
Goldman Sachs International	$	1,188	ARS	54,490	7/18/19		63
Goldman Sachs International	$	361	ARS	16,862	7/18/19		26
Citibank NA	KRW	7,533	$	7	9/11/19		(—	@)
Citibank NA	$	103	KRW	120,910	9/11/19		2
Bank of America NA	CNH	234	$	34	9/12/19		(—	@)
Bank of America NA	ILS	147	$	41	9/12/19		(—	@)
Bank of America NA	$	199	EUR	174	9/12/19		1
Bank of America NA	$	37	PLN	141	9/12/19		—	@
Barclays Bank PLC	COP	222,916	$	67	9/12/19		(2	)
Barclays Bank PLC	$	26	SGD	36	9/12/19		—	@
BNP Paribas SA	CAD	33	$	25	9/12/19		(—	@)
BNP Paribas SA	EUR	255	$	291	9/12/19		(—	@)
BNP Paribas SA	HKD	289	$	37	9/12/19		(—	@)
BNP Paribas SA	PEN	229	$	68	9/12/19		(1	)
BNP Paribas SA	$	97	EUR	85	9/12/19		—	@
BNP Paribas SA	$	470	EUR	412	9/12/19		2
BNP Paribas SA	$	128	EUR	112	9/12/19		(—	@)
BNP Paribas SA	$	17	EUR	15	9/12/19		(—	@)
BNP Paribas SA	$	45	HKD	354	9/12/19		(—	@)
BNP Paribas SA	$	9	INR	601	9/12/19		—	@
BNP Paribas SA	$	10	JPY	1,114	9/12/19		(—	@)
BNP Paribas SA	$	66	JPY	7,032	9/12/19		—	@
BNP Paribas SA	$	21	PHP	1,084	9/12/19		—	@
BNP Paribas SA	$	47	RUB	3,079	9/12/19		2
BNP Paribas SA	$	52	TWD	1,617	9/12/19		—	@
Citibank NA	CLP	71,040	$	103	9/12/19		(2	)
Citibank NA	HUF	214	$	1	9/12/19		—	@
Citibank NA	$	50	CZK	1,130	9/12/19		1
Citibank NA	$	1,273	EUR	1,117	9/12/19		4
Citibank NA	$	42	THB	1,320	9/12/19		1
Commonwealth Bank of Australia	$	7	NZD	11	9/12/19		—	@
Goldman Sachs International	BRL	89	$	23	9/12/19		—	@
Goldman Sachs International	EUR	74	$	83	9/12/19		(1	)
Goldman Sachs International	GBP	56	$	71	9/12/19		—	@
Goldman Sachs International	HKD	519	$	66	9/12/19		(—	@)
Goldman Sachs International	JPY	5,232	$	49	9/12/19		(—	@)
Goldman Sachs International	$	131	AUD	190	9/12/19		3
Goldman Sachs International	$	11	AUD	16	9/12/19		—	@
Goldman Sachs International	$	715	BRL	2,794	9/12/19		8
Goldman Sachs International	$	2,660	EUR	2,334	9/12/19		9
Goldman Sachs International	$	162	EUR	142	9/12/19		—	@
Goldman Sachs International	$	17	EUR	15	9/12/19		—	@
Goldman Sachs International	$	29	HKD	229	9/12/19		—	@
Goldman Sachs International	$	16	IDR	227,672	9/12/19		—	@
Goldman Sachs International	ZAR	8	$	1	9/12/19		(—	@)
JPMorgan Chase Bank NA	ARS	3,070	$	59	9/12/19		(6	)
JPMorgan Chase Bank NA	$	835	EUR	733	9/12/19		3
JPMorgan Chase Bank NA	ZAR	24	$	2	9/12/19		(—	@)
State Street Bank and Trust Co.	CAD	44	$	33	9/12/19		(—	@)
UBS AG	AUD	26	$	18	9/12/19		(—	@)
UBS AG	CAD	570	$	430	9/12/19		(6	)
UBS AG	CHF	75	$	76	9/12/19		(1	)
UBS AG	DKK	99	$	15	9/12/19		(—	@)

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Foreign Currency Forward Exchange Contracts (cont'd):

Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (Depreciation) (000)
UBS AG	EUR	18	$	20	9/12/19	$	—	@
UBS AG	GBP	173	$	221	9/12/19		1
UBS AG	HUF	2,419	$	9	9/12/19		—	@
UBS AG	JPY	116,382	$	1,079	9/12/19		(6	)
UBS AG	JPY	1,280	$	12	9/12/19		—	@
UBS AG	MXN	23	$	1	9/12/19		—	@
UBS AG	NOK	94	$	11	9/12/19		(—	@)
UBS AG	SEK	290	$	31	9/12/19		(1	)
UBS AG	$	469	CHF	457	9/12/19		2
UBS AG	$	467	GBP	367	9/12/19		1
UBS AG	$	469	JPY	50,063	9/12/19		(2	)
UBS AG	$	230	TRY	1,408	9/12/19		4
UBS AG	$	223	TRY	1,347	9/12/19		1
Bank of America NA	$	3	CNH	23	10/17/19		(—	@)
JPMorgan Chase Bank NA	$	1,478	CNH	10,306	10/17/19		21
JPMorgan Chase Bank NA	$	210	CNH	1,447	10/17/19		—	@
JPMorgan Chase Bank NA	$	11,014	CNH	74,856	10/17/19		(128	)
JPMorgan Chase Bank NA	$	471	CNH	3,164	10/17/19		(11	)
JPMorgan Chase Bank NA	$	70	CNH	468	10/17/19		(2	)
JPMorgan Chase Bank NA	$	2,791	CNH	18,732	10/17/19		(67	)
JPMorgan Chase Bank NA	CNH	65,625	$	9,352	10/17/19		(193	)
JPMorgan Chase Bank NA	CNH	42,737	$	6,082	10/17/19		(133	)
JPMorgan Chase Bank NA	CNH	634	$	90	10/17/19		(2	)
						$	(489	)

Futures Contracts:

The Fund had the following futures contracts open at June 30, 2019:

	Number of Contracts		Expiration Date	Notional Amount (000)			Value (000)			Unrealized Appreciation (Depreciation) (000)
Long:
100 oz Gold Future (United States)		4	Aug-19	$	—	@	$	566		$	49
Australian 3 yr. Bond (Australia)		79	Sep-19	AUD	7,900			6,378			8
DAX Index (Germany)		2	Sep-19	EUR	—	@		704			17
Euro Stoxx 50 (Germany)		13	Sep-19		—	@		512			16
MSCI Emerging Market E Mini (United States)		4	Sep-19	$	—	@		211			8
NIKKEI 225 Index (Japan)		3	Sep-19	JPY	2			297			3
U.S. Treasury 10 yr. Ultra Long Bond (United States)		11	Sep-19	$	1,100			1,519			36
Short:
Euro FX Currency (United States)		63	Sep-19		(7,875	)		(9,014	)		(56	)
Euro OAT (Germany)		2	Sep-19	EUR	(200	)		(375	)		(6	)
German Euro BONO (Germany)		1	Sep-19		(100	)		(179	)		(4	)
German Euro BTP (Germany)		7	Sep-19		(700	)		(1,069	)		(43	)
German Euro Bund (Germany)		9	Sep-19		(900	)		(1,768	)		(19	)
Hang Seng China Enterprises Index (Hong Kong)		12	Jul-19	HKD	(1	)		(832	)		—	@
S&P 500 E Mini Index (United States)		59	Sep-19	$	(3	)		(8,686	)		(145	)
TOPIX Index (Japan)		7	Sep-19	JPY	(70	)		(1,007	)		3
U.S. Treasury 2 yr. Note (United States)		7	Sep-19	$	(1,400	)		(1,506	)		(9	)
U.S. Treasury 5 yr. Note (United States)		6	Sep-19		(600	)		(709	)		(9	)
										$	(151	)

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Total Return Swap Agreements:

The Fund had the following total return swap agreements open at June 30, 2019:

Swap Counterparty	Index	Pay/Receive Total Return of Referenced Index	Floating Rate	Payment Frequency	Maturity Date	Notional Amount (000)		Value (000)			Upfront Payment Paid (000)		Unrealized Appreciation (Depreciation) (000)
Barclays Bank PLC	Barclays Long U.S. Healthcare Index††	Receive	3 Month USD LIBOR plus 0.16%	Quarterly	4/29/20	$	536	$	26		$	—	$	26
Barclays Bank PLC	Barclays Long U.S. Healthcare Index††	Receive	3 Month USD LIBOR plus 0.16%	Quarterly	4/29/20		1,114		47			—		47
BNP Paribas SA	MSCI AU Banks Index	Pay	3 Month AUD BBSW plus 0.20%	Quarterly	2/10/20	AUD	485		(20	)		—		(20	)
BNP Paribas SA	MSCI AU Banks Index	Pay	3 Month AUD BBSW plus 0.33%	Quarterly	2/10/20		952		(39	)		—		(39	)
BNP Paribas SA	MSCI AU Banks Index	Pay	3 Month AUD BBSW plus 0.13%	Quarterly	2/10/20		494		(20	)		—		(20	)
BNP Paribas SA	MSCI AU Banks Index	Pay	3 Month AUD BBSW plus 0.33%	Quarterly	2/10/20		95		(4	)		—		(4	)
BNP Paribas SA	MSCI AU Banks Index	Pay	3 Month AUD BBSW plus 0.35%	Quarterly	2/10/20		458		(19	)		—		(19	)
BNP Paribas SA	MSCI AU Banks Index	Pay	3 Month AUD BBSW plus 0.33%	Quarterly	2/10/20		443		(18	)		—		(18	)
BNP Paribas SA	Alerian MLP Total Return Index	Receive	3 Month USD LIBOR plus 0.37%	Quarterly	6/1/20	$	737		5			—		5
								$	(42	)	$	—	$	(42	)

††  See tables below for details of the equity basket holdings underlying the swap.

The following table represents the equity basket holdings underlying the total return swap with Barclays Long U.S. Healthcare Index as of June 30, 2019:

Security Description	Shares		Value (000)		Index Weight
Barclays Long U.S. Healthcare Index
Abbott Laboratories		34,539	$	2,905		4.20	%
AbbVie, Inc.		29,567		2,150		3.11
Abiomed, Inc.		839		219		0.32
Agilent Technologies, Inc.		6,258		467		0.68
Alexion Pharmaceuticals, Inc.		4,395		576		0.83
Align Technology, Inc.		1,487		407		0.59
Alkermes PLC		2,991		67		0.10
Allergan PLC		6,652		1,114		1.61
Alnylam Pharmaceuticals, Inc.		1,750		127		0.18
AmerisourceBergen Corp.		3,157		269		0.39
Amgen, Inc.		12,535		2,310		3.34
Anthem, Inc.		5,073		1,432		2.07
Baxter International, Inc.		9,965		816		1.18
Becton Dickinson and Co.		5,281		1,331		1.92
Biogen, Inc.		3,966		928		1.34
BioMarin Pharmaceutical, Inc.		3,496		299		0.43
Boston Scientific Corp.		27,133		1,166		1.69
Bristol-Myers Squibb Co.		32,035		1,453		2.10
Cardinal Health, Inc.		5,858		276		0.40
Centene Corp.		8,024		421		0.61
Cerner Corp.		5,874		431		0.62
Cigna Corp.		7,499		1,181		1.71
Cooper Cos, Inc. (The)		966		325		0.47
CVS Health Corp.		25,410		1,385		2.00
Danaher Corp.		12,411		1,774		2.57
DaVita, Inc.		2,645		149		0.22
Dentsply Sirona, Inc.		4,383		256		0.37
Dexcom, Inc.		1,749		262		0.38

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

Security Description	Shares		Value (000)		Index Weight
Barclays Long U.S. Healthcare Index (cont'd)
Edwards Lifesciences Corp.		4,094	$	756		1.09	%
Elanco Animal Health, Inc.		5,470		185		0.27
Eli Lilly & Co.		17,565		1,946		2.81
Gilead Sciences, Inc.		25,451		1,719		2.49
HCA Healthcare, Inc.		5,404		730		1.06
Henry Schein, Inc.		3,037		212		0.31
Hologic, Inc.		5,665		272		0.39
Humana, Inc.		2,704		717		1.04
IDEXX Laboratories, Inc.		1,706		470		0.68
Illumina, Inc.		2,892		1,065		1.54
Incyte Corp.		3,535		300		0.43
Intuitive Surgical, Inc.		2,250		1,180		1.71
IQVIA Holdings, Inc.		3,158		508		0.73
Jazz Pharmaceuticals PLC		1,204		172		0.25
Johnson & Johnson		52,744		7,346		10.61
Laboratory Corporation of America Holdings		1,983		343		0.50
McKesson Corp.		3,830		515		0.74
Medtronic PLC		26,402		2,571		3.72
Merck & Co., Inc.		51,123		4,287		6.20
Mettler-Toledo International, Inc.		492		413		0.60
Mylan N.V.		10,075		192		0.28
Nektar Therapeutics		3,339		119		0.17
Perrigo Co., PLC		2,509		119		0.17
Pfizer, Inc.		113,708		4,926		7.12
Quest Diagnostics, Inc.		2,674		272		0.39
Regeneron Pharmaceuticals, Inc.		1,564		490		0.71
ResMed, Inc.		2,810		343		0.50
Seattle Genetics, Inc.		2,250		156		0.23
Stryker Corp.		6,636		1,364		1.97
Teleflex, Inc.		908		301		0.43
Thermo Fisher Scientific, Inc.		7,924		2,327		3.37
United Therapeutics Corp.		878		69		0.10
UnitedHealth Group, Inc.		18,926		4,618		6.68
Universal Health Services, Inc.		1,695		221		0.32
Varian Medical Systems, Inc.		1,803		245		0.35
Veeva Systems, Inc.		2,472		401		0.58
Vertex Pharmaceuticals, Inc.		5,007		918		1.33
Waters Corp.		1,502		323		0.47
Zimmer Biomet Holdings, Inc.		4,020		473		0.68
Zoetis, Inc.		9,447		1,072		1.55
Total			$	69,152		100.00	%

@    Value is less than $500.

BBSW  Australia's Bank Bill Swap.

LIBOR  London Interbank Offered Rate.

OAT    Obligations Assimilables du Trésor (French Treasury Obligation).

ARS  —  Argentine Peso

AUD  —  Australian Dollar

BRL  —  Brazilian Real

CAD  —  Canadian Dollar

CHF  —  Swiss Franc

CLP  —  Chilean Peso

CNH  —  Chinese Yuan Renminbi Offshore

COP  —  Colombian Peso

CZK  —  Czech Koruna

DKK  —  Danish Krone

EUR  —  Euro

GBP  —  British Pound

HKD  —  Hong Kong Dollar

HUF  —  Hungarian Forint

IDR  —  Indonesian Rupiah

ILS  —  Israeli Shekel

INR  —  Indian Rupee

JPY  —  Japanese Yen

KRW  —  South Korean Won

MXN  —  Mexican Peso

NOK  —  Norwegian Krone

NZD  —  New Zealand Dollar

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Consolidated Portfolio of Investments (cont'd)

Multi-Asset Portfolio

PEN  —  Peruvian Nuevo Sol

PHP  —  Philippine Peso

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
Short-Term Investments		58.4	%
Other*		26.4
Sovereign		9.9
Banks		5.3
Total Investments		100.0	%**

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

**  Does not include open long/short futures contracts with a value of approximately $35,332,000 and net unrealized depreciation of approximately $151,000. Does not include open foreign currency forward exchange contracts with net unrealized depreciation of approximately $489,000 and does not include open swap agreements with net unrealized depreciation of approximately $42,000.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Multi-Asset Portfolio

Consolidated Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $18,236)	$	18,603
Investment in Security of Affiliated Issuer, at Value (Cost $5,861)		5,861
Total Investments in Securities, at Value (Cost $24,097)		24,464
Foreign Currency, at Value (Cost $82)		82
Cash		—	@
Receivable for Variation Margin on Futures Contracts		890
Unrealized Appreciation on Foreign Currency Forward Exchange Contracts		158
Unrealized Appreciation on Swap Agreements		78
Interest Receivable		48
Receivable for Investments Sold		44
Tax Reclaim Receivable		41
Due from Adviser		28
Dividends Receivable		11
Receivable from Affiliate		9
Other Assets		98
Total Assets		25,951
Liabilities:
Unrealized Depreciation on Foreign Currency Forward Exchange Contracts		647
Payable for Investments Purchased		129
Unrealized Depreciation on Swap Agreements		120
Payable for Professional Fees		55
Payable for Transfer Agency Fees — Class I		19
Payable for Transfer Agency Fees — Class A		2
Payable for Transfer Agency Fees — Class L		—-	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Custodian Fees		10
Payable for Administration Fees		2
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		1
Total Liabilities		987
Net Assets	$	24,964
Net Assets Consist of:
Paid-in-Capital	$	110,209
Total Accumulated Loss		(85,245	)
Net Assets	$	24,964

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Multi-Asset Portfolio

Consolidated Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	20,052
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,132,551
Net Asset Value, Offering and Redemption Price Per Share	$	9.40
CLASS A:
Net Assets	$	2,939
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		315,902
Net Asset Value, Redemption Price Per Share	$	9.30
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.52
Maximum Offering Price Per Share	$	9.82
CLASS L:
Net Assets	$	1,876
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		204,566
Net Asset Value, Offering and Redemption Price Per Share	$	9.17
CLASS C:
Net Assets	$	89
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		9,854
Net Asset Value, Offering and Redemption Price Per Share	$	8.98
CLASS IS:
Net Assets	$	8
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		902
Net Asset Value, Offering and Redemption Price Per Share	$	9.40

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Multi-Asset Portfolio

Consolidated Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers	$	182
Dividends from Securities of Unaffiliated Issuers (Net of $19 of Foreign Taxes Withheld)		178
Dividends from Security of Affiliated Issuer (Note G)		78
Total Investment Income		438
Expenses:
Advisory Fees (Note B)		134
Custodian Fees (Note F)		74
Professional Fees		58
Registration Fees		23
Administration Fees (Note C)		13
Shareholder Services Fees — Class A (Note D)		4
Distribution and Shareholder Services Fees — Class L (Note D)		7
Distribution and Shareholder Services Fees — Class C (Note D)		1
Shareholder Reporting Fees		9
Pricing Fees		9
Transfer Agency Fees — Class I (Note E)		3
Transfer Agency Fees — Class A (Note E)		3
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Sub Transfer Agency Fees — Class I		6
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		—	@
Directors' Fees and Expenses		3
Other Expenses		6
Total Expenses		358
Waiver of Advisory Fees (Note B)		(134	)
Expenses Reimbursed by Adviser (Note B)		(27	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(6	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(6	)
Net Expenses		181
Net Investment Income		257
Realized Gain (Loss):
Investments Sold		488
Foreign Currency Forward Exchange Contracts		445
Foreign Currency Translation		(33	)
Futures Contracts		(219	)
Swap Agreements		(539	)
Net Realized Gain		142
Change in Unrealized Appreciation (Depreciation):
Investments		831
Foreign Currency Forward Exchange Contracts		(762	)
Foreign Currency Translation		14
Futures Contracts		73
Swap Agreements		(278	)
Net Change in Unrealized Appreciation (Depreciation)		(122	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		20
Net Increase in Net Assets Resulting from Operations	$	277

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Multi-Asset Portfolio

Consolidated Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	257		$	668
Net Realized Gain		142			3,369
Net Change in Unrealized Appreciation (Depreciation)		(122	)		(4,414	)
Net Increase (Decrease) in Net Assets Resulting from Operations		277			(377	)
Dividends and Distributions to Shareholders:
Class I		—			(1,067	)
Class A		—			(84	)
Class L		—			(46	)
Class C		—			(2	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(1,199	)
Capital Share Transactions:(1)
Class I:
Subscribed		110			2,079
Distributions Reinvested		—			1,067
Redeemed		(18,573	)		(28,660	)
Class A:
Subscribed		16			326
Distributions Reinvested		—			71
Redeemed		(481	)		(694	)
Class L:
Distributions Reinvested		—			46
Redeemed		(418	)		(916	)
Class C:
Subscribed		13			48
Distributions Reinvested		—			2
Redeemed		(53	)		(44	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(19,386	)		(26,675	)
Total Decrease in Net Assets		(19,109	)		(28,251	)
Net Assets:
Beginning of Period		44,073			72,324
End of Period	$	24,964		$	44,073
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		12			214
Shares Issued on Distributions Reinvested		—			114
Shares Redeemed		(1,971	)		(2,991	)
Net Decrease in Class I Shares Outstanding		(1,959	)		(2,663	)
Class A:
Shares Subscribed		2			34
Shares Issued on Distributions Reinvested		—			8
Shares Redeemed		(52	)		(73	)
Net Decrease in Class A Shares Outstanding		(50	)		(31	)
Class L:
Shares Issued on Distributions Reinvested		—			5
Shares Redeemed		(46	)		(99	)
Net Decrease in Class L Shares Outstanding		(46	)		(94	)
Class C:
Shares Subscribed		2			5
Shares Issued on Distributions Reinvested		—			—	@@
Shares Redeemed		(6	)		(5	)
Net Increase (Decrease) in Class C Shares Outstanding		(4	)		—	@@

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Consolidated Financial Highlights

Multi-Asset Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015(2)			2014(2)
Net Asset Value, Beginning of Period	$	9.35		$	9.65		$	9.72		$	10.17		$	11.55		$	11.68
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		0.08			0.11			0.19			0.03			0.07			(0.02	)
Net Realized and Unrealized Gain (Loss)		(0.03	)		(0.14	)		(0.26	)		(0.31	)		(1.29	)		0.11
Total from Investment Operations		0.05			(0.03	)		(0.07	)		(0.28	)		(1.22	)		0.09
Distributions from and/or in Excess of:
Net Investment Income		—			(0.27	)		—			(0.17	)		(0.16	)		(0.22	)
Net Realized Gain		—			—			—			—			—			(0.00	)(4)
Total Distributions		—			(0.27	)		—			(0.17	)		(0.16	)		(0.22	)
Net Asset Value, End of Period	$	9.40		$	9.35		$	9.65		$	9.72		$	10.17		$	11.55
Total Return(5)		0.53	%(7)		(0.32	)%		(0.72	)%		(2.75	)%		(10.60	)%		0.77	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	20,052		$	38,254		$	65,156		$	109,692		$	280,423		$	495,419
Ratio of Expenses Before Expense Limitation		2.16	%(8)		1.78	%		1.44	%		1.25	%		1.14	%		1.21	%
Ratio of Expenses After Expense Limitation		1.07	%(6)(8)		1.06	%(6)		1.03	%(6)		1.04	%(6)		1.05	%(6)		1.01	%(6)
Ratio of Net Investment Income (Loss)		1.66	%(6)(8)		1.17	%(6)		1.91	%(6)		0.35	%(6)		0.60	%(6)		(0.14	)%(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.04	%(8)		0.04	%		0.07	%		0.06	%		0.04	%		0.09	%
Portfolio Turnover Rate		96	%(7)		187	%		386	%		353	%		355	%		264	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Not consolidated.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Consolidated Financial Highlights

Multi-Asset Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015(2)			2014(2)
Net Asset Value, Beginning of Period	$	9.27		$	9.54		$	9.68		$	10.09		$	11.50		$	11.63
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		0.07			0.15			0.14			(0.00	)(4)		0.03			(0.05	)
Net Realized and Unrealized Gain (Loss)		(0.04	)		(0.19	)		(0.28	)		(0.31	)		(1.28	)		0.11
Total from Investment Operations		0.03			(0.04	)		(0.14	)		(0.31	)		(1.25	)		0.06
Distributions from and/or in Excess of:
Net Investment Income		—			(0.23	)		—			(0.10	)		(0.16	)		(0.19	)
Net Realized Gain		—			—			—			—			—			(0.00	)(4)
Total Distributions		—			(0.23	)		—			(0.10	)		(0.16	)		(0.19	)
Net Asset Value, End of Period	$	9.30		$	9.27		$	9.54		$	9.68		$	10.09		$	11.50
Total Return(5)		0.32	%(7)		(0.59	)%		(1.24	)%		(2.94	)%		(11.00	)%		0.55	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,939		$	3,392		$	3,791		$	12,914		$	29,123		$	54,771
Ratio of Expenses Before Expense Limitation		2.57	%(8)		2.21	%		1.76	%		1.59	%		1.47	%		1.46	%
Ratio of Expenses After Expense Limitation		1.42	%(6)(8)		1.41	%(6)		1.38	%(6)		1.39	%(6)		1.37	%(6)		1.30	%(6)
Ratio of Net Investment Income (Loss)		1.59	%(6)(8)		1.64	%(6)		1.46	%(6)		(0.01	)%(6)		0.27	%(6)		(0.43	)%(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.04	%(8)		0.04	%		0.07	%		0.06	%		0.04	%		0.09	%
Portfolio Turnover Rate		96	%(7)		187	%		386	%		353	%		355	%		264	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Not consolidated.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Consolidated Financial Highlights

Multi-Asset Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015(2)			2014(2)
Net Asset Value, Beginning of Period	$	9.16		$	9.44		$	9.60		$	9.94		$	11.39		$	11.53
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(3)		0.05			0.08			0.10			(0.04	)		(0.02	)		(0.10	)
Net Realized and Unrealized Gain (Loss)		(0.04	)		(0.18	)		(0.26	)		(0.30	)		(1.27	)		0.10
Total from Investment Operations		0.01			(0.10	)		(0.16	)		(0.34	)		(1.29	)		(0.00	)(4)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.18	)		—			—			(0.16	)		(0.14	)
Net Realized Gain		—			—			—			—			—			(0.00	)(4)
Total Distributions		—			(0.18	)		—			—			(0.16	)		(0.14	)
Net Asset Value, End of Period	$	9.17		$	9.16		$	9.44		$	9.60		$	9.94		$	11.39
Total Return(5)		0.11	%(7)		(1.04	)%		(1.67	)%		(3.42	)%		(11.37	)%		0.02	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,876		$	2,291		$	3,242		$	6,357		$	14,443		$	41,253
Ratio of Expenses Before Expense Limitation		2.99	%(8)		2.57	%		2.24	%		2.02	%		1.92	%		1.93	%
Ratio of Expenses After Expense Limitation		1.92	%(6)(8)		1.88	%(6)		1.86	%(6)		1.85	%(6)		1.85	%(6)		1.77	%(6)
Ratio of Net Investment Income (Loss)		1.06	%(6)(8)		0.83	%(6)		1.09	%(6)		(0.43	)%(6)		(0.18	)%(6)		(0.90	)%(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.04	%(8)		0.04	%		0.07	%		0.06	%		0.04	%		0.09	%
Portfolio Turnover Rate		96	%(7)		187	%		386	%		353	%		355	%		264	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Not consolidated.

(3)  Per share amount is based on average shares outstanding.

(4)  Amount is less than $0.005 per share.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Consolidated Financial Highlights

Multi-Asset Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015(3)
Net Asset Value, Beginning of Period	$	8.99		$	9.28		$	9.47		$	9.93		$	11.09
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(4)		0.03			0.13			0.07			(0.09	)		(0.07	)
Net Realized and Unrealized Loss		(0.04	)		(0.25	)		(0.26	)		(0.28	)		(0.93	)
Total from Investment Operations		(0.01	)		(0.12	)		(0.19	)		(0.37	)		(1.00	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.17	)		—			(0.09	)		(0.16	)
Net Asset Value, End of Period	$	8.98		$	8.99		$	9.28		$	9.47		$	9.93
Total Return(5)		0.00	%(7)		(1.48	)%		(1.90	)%		(3.70	)%		(9.07	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	89		$	128		$	126		$	272		$	420
Ratio of Expenses Before Expense Limitation		4.83	%(8)		4.57	%		3.67	%		2.88	%		2.59	%(8)
Ratio of Expenses After Expense Limitation		2.17	%(6)(8)		2.16	%(6)		2.13	%(6)		2.14	%(6)		2.17	%(6)(8)
Ratio of Net Investment Income (Loss)		0.70	%(6)(8)		1.39	%(6)		0.70	%(6)		(0.95	)%(6)		(1.07	)%(6)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.04	%(8)		0.04	%		0.07	%		0.06	%		0.03	%(8)
Portfolio Turnover Rate		96	%(7)		187	%		386	%		353	%		355	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Commencement of offering.

(3)  Not consolidated.

(4)  Per share amount is based on average shares outstanding.

(5)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the consolidated financial statements.
20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Consolidated Financial Highlights

Multi-Asset Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from May 29, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015(3)
Net Asset Value, Beginning of Period	$	9.34		$	9.65		$	9.72		$	10.17		$	11.09
Income (Loss) from Investment Operations:
Net Investment Income(4)		0.09			0.22			0.25			0.13			0.01
Net Realized and Unrealized Loss		(0.03	)		(0.26	)		(0.32	)		(0.41	)		(0.77	)
Total from Investment Operations		0.06			0.04			(0.07	)		(0.28	)		(0.76	)
Distributions from and/or in Excess of:
Net Investment Income		—			(0.27	)		—			(0.17	)		(0.16	)
Net Asset Value, End of Period	$	9.40		$	9.34		$	9.65		$	9.72		$	10.17
Total Return(5)		0.54	%(7)		(0.28	)%		(0.82	)%		(2.65	)%		(6.89	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	8		$	8		$	9		$	9		$	9
Ratio of Expenses Before Expense Limitation		21.23	%(8)		24.87	%		22.88	%		22.77	%		17.31	%(8)
Ratio of Expenses After Expense Limitation		1.04	%(6)(8)		1.03	%(6)		1.01	%(6)		1.01	%(6)		1.04	%(6)(8)
Ratio of Net Investment Income		1.99	%(6)(8)		2.31	%(6)		2.53	%(6)		1.36	%(6)		0.23	%(6)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.04	%(8)		0.04	%		0.06	%		0.06	%		0.03	%(8)
Portfolio Turnover Rate		96	%(7)		187	%		386	%		353	%		355	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of offering.

(3)  Not consolidated.

(4)  Per share amount is based on average shares outstanding.

(5)  Calculated based on the net asset value as of the last business day of the period.

(6)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(7)  Not annualized.

(8)  Annualized.

The accompanying notes are an integral part of the consolidated financial statements.
21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited)

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

The accompanying consolidated financial statements relate to the Multi- Asset Portfolio. The Fund seeks total return. The Fund's "Adviser", Morgan Stanley Investment Management Inc., seeks to achieve this objective with an emphasis on positive absolute return and controlling downside portfolio risk.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company in the preparation of its consolidated financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results may differ from those estimates.

The Fund may, consistent with its principal investment strategies, invest up to 25% of its total assets in a wholly-owned subsidiary of the Fund organized as a company under the laws of the Cayman Islands, Multi-Asset Cayman Portfolio, Ltd. (the "Subsidiary"). The Subsidiary may invest, directly or indirectly through the use of derivatives, in securities, commodities, commodity-related instruments and other investments, primarily futures, swaps and notes. The Fund is the sole shareholder of the Subsidiary, and it is not currently expected that shares of the Subsidiary will be sold or offered to other investors. The consolidated portfolio of investments and consolidated financial statements include the positions and accounts of the Fund and the Subsidiary. All intercompany accounts and transactions of the Fund and the Subsidiary have been eliminated in consolidation. As of June 30, 2019, the Subsidiary represented approximately $5,906,000 or approximately 23.7% of the total net assets of the Fund.

Investments in the Subsidiary are expected to provide the Fund with exposure to the commodity markets within the

limitations of Subchapter M of the Code and recent Internal Revenue Service ("IRS") revenue rulings, which require that a mutual fund receive no more than ten percent of its gross income from such investments in order to receive favorable tax treatment as a regulated investment company ("RIC"). Tax treatment of the income received from the Subsidiary may potentially be affected by changes in legislation, regulations or other legally binding authority, which could affect the character, timing and amount of the Fund's taxable income and distributions. If such changes occur, the Fund may need to significantly change its investment strategy and recognize unrealized gains in order to remain qualified for taxation as a RIC, which could adversely affect the Fund.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's consolidated financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited) (cont'd)

over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (5) OTC swaps may be valued by an outside pricing service approved by the Directors or quotes from a broker or dealer. Swaps cleared on a clearinghouse or exchange may be valued using the closing price provided by the clearinghouse or exchange; (6) 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; (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; and (8) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited) (cont'd)

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 Fund's investments as of June 30, 2019:

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	$	—	$	142	$	—	$	142
Auto Components		—		5		—		5
Automobiles		—		272		—		272
Banks		566		722		—		1,288
Beverages		44		28		—		72
Biotechnology		14		4		—		18
Commercial Services & Supplies		—		98		—		98
Construction & Engineering		—		806		—		806

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)			Level 3 Significant unobservable inputs (000)		Total (000)
Distributors	$	—	$	11		$	—	$	11
Diversified Telecommunication Services		150		104			—		254
Electric Utilities		116		62			—		178
Equity Real Estate Investment Trusts (REITs)		—		—	@		—		—	@
Food & Staples Retailing		18		11			—		29
Food Products		5		39			—		44
Gas Utilities		—		21			—		21
Health Care Equipment & Supplies		22		6			—		28
Health Care Providers & Services		5		3			—		8
Hotels, Restaurants & Leisure		—		131			—		131
Household Durables		—		51			—		51
Household Products		55		10			—		65
Independent Power & Renewable Electricity Producers		4		2			—		6
Industrial Conglomerates		—		32			—		32
Information Technology Services		91		461			—		552
Internet & Direct Marketing Retail		—		255			—		255
Investment Companies		—		1			—		1
Leisure Products		—		7			—		7
Life Sciences Tools & Services		—		3			—		3
Machinery		—		69			—		69
Metals & Mining		—		60			—		60
Multi-Utilities		20		36			—		56
Oil & Gas Services		134		—			—		134
Oil, Gas & Consumable Fuels		598		—			—		598
Paper & Forest Products		—		69			—		69
Personal Products		—		23			—		23
Pharmaceuticals		52		57			—		109
Professional Services		—		28			—		28
Real Estate Management & Development		—		1,033			—		1,033
Road & Rail		—		75			—		75
Specialty Retail		—		59			—		59
Textiles, Apparel & Luxury Goods		—		10			—		10
Tobacco		13		11			—		24
Trading Companies & Distributors		—		8			—		8
Transportation Infrastructure		12		883			—		895
Water Utilities		—		4			—		4
Wireless Telecommunication Services		15		114			—		129
Total Common Stocks		1,934		5,826			—		7,760
Fixed Income Securities		—		2,426			—		2,426

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited) (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)
Short-Term Investments
Investment Company	$	5,861		$	—		$	—	$	5,861
U.S. Treasury Security		—			8,417			—		8,417
Total Short-Term Investments		5,861			8,417			—		14,278
Foreign Currency Forward Exchange Contracts		—			158			—		158
Futures Contracts		140			—			—		140
Total Return Swap Agreements		—			78			—		78
Total Assets		7,935			16,905			—		24,840
Liabilities:
Foreign Currency Forward Exchange Contracts		—			(647	)		—		(647	)
Futures Contracts		(291	)		—			—		(291	)
Total Return Swap Agreements		—			(120	)		—		(120	)
Total Liabilities		(291	)		(767	)		—		(1,058	)
Total	$	7,644		$	16,138		$	—	$	23,782

@  Value is less than $500.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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

	Common Stock (000)
Beginning Balance	$	8
Purchases		—
Sales		(159	)
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation		151
Realized (losses)		—
Ending Balance	$	—
Net change in unrealized (depreciation) from investments still held as of June 30, 2019	$	151

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions for the period is reflected in the Consolidated 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

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited) (cont'd)

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 Consolidated 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or

may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund 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 may 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 Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund 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 Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited) (cont'd)

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 Fund'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 Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

Swaps: The Fund 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 Fund'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 Fund's ultimate counterparty is a clearinghouse rather than a swap dealer, bank 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. 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 Fund or if the reference index, security or investments do not perform as expected. 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.

When the Fund has an unrealized loss on a swap agreement, the Fund 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 Consolidated Statement of Assets and Liabilities.

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

FASB ASC 815, "Derivatives and Hedging" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited) (cont'd)

The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Consolidated 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	$	158
Futures Contract	Variation Margin on Futures Contract	Commodity Risk		49	(a)
Futures Contracts	Variation Margin on Futures Contracts	Equity Risk		47	(a)
Futures Contracts	Variation Margin on Futures Contracts	Interest Rate Risk		44	(a)
Swap Agreements	Unrealized Appreciation on Swap Agreements	Equity Risk		78
Total			$	376
	Liability Derivatives Consolidated 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	$	(647	)
Futures Contract	Variation Margin on Futures Contract	Currency Risk		(56	)(a)
Futures Contracts	Variation Margin on Futures Contracts	Equity Risk		(145	)(a)
Futures Contracts	Variation Margin on Futures Contracts	Interest Rate Risk		(90	)(a)
Swap Agreements	Unrealized Depreciation on Swap Agreements	Equity Risk		(120	)
Total			$	(1,058	)

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

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	445
Commodity Risk	Futures Contracts		145
Currency Risk	Futures Contracts		166
Equity Risk	Futures Contracts		(572	)
Interest Rate Risk	Futures Contracts		42
Equity Risk	Swap Agreements		(24	)
Interest Rate Risk	Swap Agreements		(515	)
Total		$	(313	)

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(762	)
Commodity Risk	Futures Contracts		(24	)
Currency Risk	Futures Contracts		31
Equity Risk	Futures Contracts		171
Interest Rate Risk	Futures Contracts		(105	)
Equity Risk	Swap Agreements		(329	)
Interest Rate Risk	Swap Agreements		51
Total		$	(967	)

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Consolidated Statement of Assets and Liabilities
Derivatives(b)	Assets(c) (000)		Liabilities(c) (000)
Foreign Currency Forward Exchange Contracts	$	158	$	(647	)
Swap Agreements		78		(120	)
Total	$	236	$	(767	)

(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 Consolidated Statement of Assets and Liabilities.

The Fund 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 Fund 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 potential 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

28

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited) (cont'd)

Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Consolidated Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Received(d) (000)			Net Amount (not less than $0) (000)
Bank of America NA	$	1		$	(—	@)	$	—		$	1
Barclays Bank PLC		73			(2	)		—			71
BNP Paribas SA		12			(5	)		—			7
Citibank NA		8			(2	)		—			6
Goldman Sachs International		109			(84	)		—			25
JPMorgan Chase Bank NA		24			(24	)		—			0
UBS AG		9			(9	)		—			0
Total	$	236		$	(126	)	$	—		$	110
Gross Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
Counterparty	Gross Liability Derivatives Presented in the Consolidated Statement of Assets and Liabilities (000)			Financial Instrument (000)			Collateral Pledged(d) (000)			Net Amount (not less than $0) (000)
Bank of America NA	$	—	@	$	(—	@)	$	—		$	0
Barclays Bank PLC		2			(2	)		—			0
BNP Paribas SA		121			(5	)		—			116
Citibank NA		2			(2	)		—			0
Commonwealth Bank of Australia		—	@		—			—			—	@
Goldman Sachs International		84			(84	)		—			0
JPMorgan Chase Bank NA		542			(24	)		(518	)		0
State Street Bank and Trust Co.		—	@		—			—			—	@
UBS AG		16			(9	)		—			7
Total	$	767		$	(126	)	$	(518	)	$	123

@ Value is less than $500.

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

For the six months ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	102,846,000
Futures Contracts:
Average monthly notional value	$	49,807,000
Swap Agreements:
Average monthly notional amount	$	3,319,000

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

6.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, paid

29

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited) (cont'd)

quarterly, at the annual rate based on the daily net assets as follows:

First $750 million			Next $750 million			Over $1.5 billion
	0.85	%		0.80	%		0.75	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund 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, 1.45% for Class A shares, 1.95% for Class L shares, 2.20% for Class C shares and 1.07% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $134,000 of advisory fees were waived and approximately $37,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

The Adviser provides investment advisory services to the Subsidiary pursuant to the Subsidiary Investment Management Agreement (the "Agreement"). Under the Agreement, the Subsidiary will pay the Adviser at the end of each fiscal quarter, calculated by applying a quarterly rate, based on the annual rate of 0.05%, to the average daily net assets of the Subsidiary.

The Adviser has agreed to waive its advisory fees by the amount of advisory fees it receives from the Subsidiary.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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.

30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited) (cont'd)

G. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $16,129,000 and $17,746,000, respectively. For the six months ended June 30, 2019, purchases and sales of long-term U.S. Government securities were approximately $2,675,000 and $11,377,000, respectively.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Government Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $6,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	10,467	$	28,288	$	32,894	$	78

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	5,861

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible

Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 consolidated financial statements.

The Fund 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 consolidated 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 consolidated financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Consolidated Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	1,199	$	—	$	—	$	—

31

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Consolidated Financial Statements (unaudited) (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 primarily due to differing book and tax treatments in 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 a net operating loss, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)		Paid-in- Capital (000)
$	1	$	(1	)

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	806	$	—

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $84,638,000 and $790,000 respectively that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund 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, 2018, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $2,507,000.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended

June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 79.1%.

K. Accounting Pronouncement: In March 2017, FASB issued an Accounting Standard Update, ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08") which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. ASU 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be accreted to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Fund has adopted ASU 2017-08 as of June 30, 2019 and it did not have an impact on the Fund's consolidated financial statements.

32

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the three- and five-year periods but better than 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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

33

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

34

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

35

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

36

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

37

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIMASAN
2668935 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Real Assets Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	8
Statement of Operations	9
Statements of Changes in Net Assets	10
Financial Highlights	11
Notes to Financial Statements	15
Investment Advisory Agreement Approval	24
Privacy Notice	26
Director and Officer Information	28

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Real Assets Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Real Assets Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Real Assets Portfolio Class I	$	1,000.00	$	1,126.40	$	1,021.03	$	4.01	$	3.81		0.76	%
Real Assets Portfolio Class A		1,000.00		1,123.70		1,019.14		6.00		5.71		1.14
Real Assets Portfolio Class C		1,000.00		1,120.00		1,015.42		9.93		9.44		1.89
Real Assets Portfolio Class IS		1,000.00		1,126.40		1,021.12		3.90		3.71		0.74

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Real Assets Portfolio

	Shares		Value (000)
Common Stocks (72.6%)
Australia (2.7%)
APA Group		2,480	$	19
Atlas Arteria Ltd.		4,309		24
BHP Group Ltd.		17		1
Computershare Ltd.		1,127		13
GPT Group (The) REIT		2,955		13
Origin Energy Ltd.		28		—	@
Santos Ltd.		3,486		18
Scentre Group REIT		8,990		24
Sydney Airport		6,431		36
Transurban Group		8,326		86
Wesfarmers Ltd.		52		1
Woodside Petroleum Ltd.		754		19
Woolworths Group Ltd.		896		21
				275
Canada (5.3%)
Bank of Nova Scotia (The)		369		20
Bombardier, Inc., Class B (a)		2,895		5
Enbridge, Inc.		3,389		122
Hydro One Ltd.		7,045		123
National Bank of Canada		838		40
Pembina Pipeline Corp.		1,555		58
RioCan Real Estate Investment Trust REIT		466		9
Royal Bank of Canada		394		31
TC Energy Corp.		2,340		116
Toronto-Dominion Bank (The)		306		18
				542
China (0.9%)
China Gas Holdings Ltd. (b)		14,841		55
China Overseas Land & Investment Ltd. (b)		393		1
China Tower Corp. Ltd. H Shares (b)		25,992		7
ENN Energy Holdings Ltd. (b)		3,042		30
				93
Denmark (0.2%)
Carlsberg A/S Series B		167		22
Finland (0.2%)
Citycon OYJ		842		9
Nokian Renkaat Oyj (a)		387		12
				21
France (3.6%)
Aeroports de Paris (ADP)		95		17
Airbus SE		113		16
Gecina SA REIT		292		43
Getlink SE		2,543		41
ICADE REIT		76		7
Klepierre SA REIT		3,012		101
Sanofi		232		20
Unibail-Rodamco-Westfield REIT		179		27
Vinci SA		949		97
				369

	Shares		Value (000)
Germany (0.8%)
ADO Properties SA		107	$	5
BASF SE		253		18
Deutsche Wohnen SE		608		22
SAP SE		121		17
Siemens AG (Registered)		150		18
				80
Hong Kong (5.6%)
China Everbright International Ltd.		18,674		17
CK Asset Holdings Ltd.		1,082		9
Dairy Farm International Holdings Ltd.		1,683		12
Hong Kong Exchanges & Clearing Ltd.		5		—	@
Hongkong Land Holdings Ltd.		25,028		161
Hysan Development Co., Ltd.		5,874		30
Link REIT		2,827		35
New World Development Co., Ltd.		6,161		10
Sun Hung Kai Properties Ltd.		9,548		162
Swire Properties Ltd.		28,485		115
Wharf Real Estate Investment Co., Ltd.		2,644		19
				570
India (0.3%)
Azure Power Global Ltd. (a)		2,862		30
Ireland (0.0%)
Hibernia REIT PLC		1,606		3
Italy (0.9%)
Atlantia SpA		1,011		26
Eni SpA		1,345		22
Infrastrutture Wireless Italiane SpA		799		8
Italgas SpA		2,377		16
Snam SpA		3,429		17
Terna Rete Elettrica Nazionale SpA		440		3
				92
Japan (2.8%)
Aeon Co., Ltd.		850		15
GLP J-REIT		4		4
ITOCHU Corp.		1,201		23
Mitsubishi Corp.		899		24
Mitsubishi Estate Co., Ltd.		3,597		67
Mitsui Fudosan Co., Ltd.		1,837		44
Mizuho Financial Group, Inc.		15,224		22
Nippon Building Fund, Inc. REIT		2		14
Shiseido Co., Ltd.		196		15
Sumitomo Corp.		1,153		17
Sumitomo Electric Industries Ltd.		1,352		18
Sumitomo Mitsui Financial Group, Inc.		645		23
				286
Mexico (1.7%)
Promotora y Operadora de Infraestructura SAB de CV		16,946		169
Netherlands (0.7%)
Eurocommercial Properties N.V. CVA REIT		1,503		40

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Real Assets Portfolio

	Shares		Value (000)
Netherlands (cont'd)
Koninklijke DSM N.V.		219	$	27
Koninklijke Vopak N.V.		165		8
				75
New Zealand (0.3%)
Auckland International Airport Ltd.		4,374		29
Norway (0.2%)
Telenor ASA		704		15
Portugal (0.2%)
Galp Energia SGPS SA		1,102		17
Singapore (0.2%)
Keppel Corp., Ltd.		4,101		20
UOL Group Ltd.		631		4
				24
Spain (2.6%)
Aena SME SA		112		22
Atlantica Yield PLC		5,462		124
Cellnex Telecom SA (a)		76		3
Ferrovial SA		1,610		41
Inmobiliaria Colonial Socimi SA REIT		178		2
Merlin Properties Socimi SA REIT		2,454		34
Red Electrica Corp., SA		727		15
Repsol SA		1,554		25
				266
Sweden (0.1%)
Hufvudstaden AB, Class A		691		12
Switzerland (1.1%)
Barry Callebaut AG (Registered)		8		16
Credit Suisse Group AG (Registered) (a)		1,482		18
Flughafen Zurich AG (Registered)		109		20
Nestle SA (Registered)		199		21
Novartis AG (Registered)		203		18
Roche Holding AG (Genusschein)		74		21
				114
United Kingdom (5.9%)
Anglo American PLC		677		19
British Land Co., PLC (The) REIT		9,286		64
Derwent London PLC REIT		1,141		45
Diageo PLC		439		19
GlaxoSmithKline PLC		11		—	@
Great Portland Estates PLC REIT		6,543		57
Hammerson PLC REIT		11,453		40
HSBC Holdings PLC		2,806		23
John Laing Group PLC		9,721		49
Land Securities Group PLC REIT		8,452		90
National Grid PLC		9,843		105
Pennon Group PLC		983		9
Royal Dutch Shell PLC, Class A		722		24
RSA Insurance Group PLC		2,229		16
Severn Trent PLC		823		21
United Utilities Group PLC		784		8

	Shares		Value (000)
Urban & Civic PLC		1,034	$	4
Weir Group PLC (The)		700		14
				607
United States (36.3%)
Abbott Laboratories		267		22
AbbVie, Inc.		165		12
Adobe, Inc. (a)		76		22
Agilent Technologies, Inc.		225		17
Alphabet, Inc., Class C (a)		38		41
Amazon.com, Inc. (a)		24		45
American Electric Power Co., Inc.		64		6
American Express Co.		210		26
American Homes 4 Rent, Class A REIT		335		8
American Tower Corp. REIT		1,017		208
American Water Works Co., Inc.		597		69
Analog Devices, Inc.		157		18
Apartment Investment & Management Co., Class A REIT		255		13
Apple, Inc.		266		53
Aqua America, Inc.		855		35
Arthur J Gallagher & Co.		216		19
AT&T, Inc.		571		19
Atmos Energy Corp.		571		60
AvalonBay Communities, Inc. REIT		355		72
Bank of America Corp.		766		22
Baxter International, Inc.		215		18
Boston Properties, Inc. REIT		845		109
Brixmor Property Group, Inc. REIT		2,043		36
Camden Property Trust REIT		166		17
Caterpillar, Inc.		117		16
Celanese Corp.		151		16
CenterPoint Energy, Inc.		629		18
Charles Schwab Corp. (The)		343		14
Cheniere Energy, Inc. (a)		736		50
Chevron Corp.		152		19
Citrix Systems, Inc.		170		17
Coca-Cola Co. (The)		355		18
Columbia Property Trust, Inc. REIT		258		5
Comcast Corp., Class A		400		17
Consolidated Edison, Inc.		637		56
Corteva, Inc. (a)		129		4
Crown Castle International Corp. REIT		966		126
CSX Corp.		271		21
CubeSmart REIT		233		8
DiamondRock Hospitality Co. REIT		2,678		28
Discover Financial Services		272		21
Dover Corp.		168		17
DuPont de Nemours, Inc.		129		10
Edison International		858		58
Equity Residential REIT		726		55
Essex Property Trust, Inc. REIT		71		21
Eversource Energy		808		61
F5 Networks, Inc. (a)		90		13

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Real Assets Portfolio

	Shares		Value (000)
United States (cont'd)
Facebook, Inc., Class A (a)		141	$	27
Federal Realty Investment Trust REIT		68		9
FLIR Systems, Inc.		310		17
Garmin Ltd.		282		22
Gilead Sciences, Inc.		226		15
HCA Healthcare, Inc.		118		16
HCP, Inc. REIT		293		9
Healthcare Realty Trust, Inc. REIT		314		10
Host Hotels & Resorts, Inc. REIT		3,617		66
Hudson Pacific Properties, Inc. REIT		691		23
Intel Corp.		332		16
International Business Machines Corp.		175		24
Intuitive Surgical, Inc. (a)		34		18
JBG SMITH Properties REIT		357		14
Johnson & Johnson		227		32
JPMorgan Chase & Co.		311		35
Kinder Morgan, Inc.		3,773		79
LKQ Corp. (a)		537		14
Macerich Co. (The) REIT		3,333		112
Mack-Cali Realty Corp. REIT		2,184		51
Mastercard, Inc., Class A		89		23
Merck & Co., Inc.		237		20
Microsoft Corp.		500		67
Mid-America Apartment Communities, Inc. REIT		65		8
Mondelez International, Inc., Class A		414		22
Netflix, Inc. (a)		37		14
NiSource, Inc.		961		28
Norfolk Southern Corp.		112		22
ONEOK, Inc.		606		42
Paramount Group, Inc. REIT		1,051		15
PepsiCo, Inc.		190		25
Pfizer, Inc.		547		24
Procter & Gamble Co. (The)		189		21
ProLogis, Inc. REIT		225		18
Prudential Financial, Inc.		208		21
PTC, Inc. (a)		190		17
Public Storage REIT		23		5
QTS Realty Trust, Inc., Class A REIT		153		7
QUALCOMM, Inc.		239		18
Regency Centers Corp. REIT		747		50
RLJ Lodging Trust REIT		1,879		33
salesforce.com, Inc. (a)		124		19
SBA Communications Corp. REIT (a)		236		53
Sempra Energy		736		101
Simon Property Group, Inc. REIT		1,042		166
SL Green Realty Corp. REIT		2,298		185
Steel Dynamics, Inc.		402		12
Sunstone Hotel Investors, Inc. REIT		1,922		26
Targa Resources Corp.		398		16
Thermo Fisher Scientific, Inc.		66		19
Tiffany & Co.		144		13
Torchmark Corp.		264		24

	Shares		Value (000)
UnitedHealth Group, Inc.		70	$	17
Verizon Communications, Inc.		384		22
Vornado Realty Trust REIT		1,853		119
Walt Disney Co. (The)		177		25
Waste Connections, Inc.		185		18
Williams Cos., Inc. (The)		3,280		92
Xcel Energy, Inc.		72		4
Xylem, Inc.		220		18
				3,714
Total Common Stocks (Cost $7,118)				7,425
	Face Amount (000)
U.S. Treasury Securities (24.8%)
United States (24.8%)
U.S. Treasury Inflation Index Notes (TIPS),
0.13%, 4/15/21 - 7/15/24	$	879		875
0.38%, 7/15/23 - 1/15/27		614		619
0.75%, 2/15/42		61		61
1.00%, 2/15/46		249		261
2.00%, 1/15/26		17		19
2.13%, 2/15/40		47		61
2.38%, 1/15/27		237		274
3.63%, 4/15/28		137		176
3.88%, 4/15/29		140		187
Total U.S. Treasury Securities (Cost $2,483)				2,533
	Shares
Short-Term Investment (2.7%)
Investment Company (2.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $277)		277,026		277
Total Investments (100.1%) (Cost $9,878) (c)(d)(e)				10,235
Liabilities in Excess of Other Assets (–0.1%)				(12	)
Net Assets (100.0%)			$	10,223

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  Security trades on the Hong Kong exchange.

(c)  The approximate fair value and percentage of net assets, $2,846,000 and 27.8%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

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

(e)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $638,000 and the aggregate gross unrealized depreciation is approximately $281,000, resulting in net unrealized appreciation of approximately $357,000.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Real Assets Portfolio

@  Value is less than $500.

CVA  Certificaten Van Aandelen.

REIT  Real Estate Investment Trust.

TIPS  Treasury Inflation-Protected Security.

Foreign Currency Forward Exchange Contract:

The Fund had the following foreign currency forward exchange contract open at June 30, 2019:

Counterparty	Contract to Deliver (000)		In Exchange For (000)		Delivery Date	Unrealized Appreciation (000)
UBS AG	JPY	132	$	1	9/19/19	$	—	@

@  —  Value is less than $500.

JPY  —  Japanese Yen

Portfolio Composition

Classification	Percentage of Total Investments
Other*		38.6	%
U.S. Treasury Securities		24.7
Equity Real Estate Investment Trusts (REITs)		22.8
Oil, Gas & Consumable Fuels		7.3
Real Estate Management & Development		6.6
Total Investments		100.0	%**

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

**  Does not include an open foreign currency forward exchange contract with unrealized appreciation of less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Real Assets Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $9,601)	$	9,958
Investment in Security of Affiliated Issuer, at Value (Cost $277)		277
Total Investments in Securities, at Value (Cost $9,878)		10,235
Foreign Currency, at Value (Cost $28)		29
Due from Adviser		87
Dividends Receivable		21
Interest Receivable		8
Receivable for Investments Sold		4
Tax Reclaim Receivable		1
Receivable from Affiliate		1
Unrealized Appreciation on Foreign Currency Forward Exchange Contract		—	@
Other Assets		53
Total Assets		10,439
Liabilities:
Payable for Offering Costs		152
Payable for Professional Fees		47
Payable for Investments Purchased		13
Payable for Custodian Fees		1
Payable for Administration Fees		1
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Other Liabilities		2
Total Liabilities		216
Net Assets	$	10,223
Net Assets Consist of:
Paid-in-Capital	$	9,999
Total Distributable Earnings		224
Net Assets	$	10,223
CLASS I:
Net Assets	$	10,172
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000,442
Net Asset Value, Offering and Redemption Price Per Share	$	10.17
CLASS A:
Net Assets	$	20
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,003
Net Asset Value, Redemption Price Per Share	$	10.15
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.56
Maximum Offering Price Per Share	$	10.71
CLASS C:
Net Assets	$	21
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		2,043
Net Asset Value, Offering and Redemption Price Per Share	$	10.14
CLASS IS:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,003
Net Asset Value, Offering and Redemption Price Per Share	$	10.17

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Real Assets Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $8 of Foreign Taxes Withheld)	$	119
Interest from Securities of Unaffiliated Issuers		19
Non-Cash Dividends from Securities of Unaffiliated Issuers		9
Dividends from Security of Affiliated Issuer (Note G)		4
Total Investment Income		151
Expenses:
Offering Costs		87
Professional Fees		49
Advisory Fees (Note B)		29
Custodian Fees (Note F)		27
Shareholder Reporting Fees		7
Pricing Fees		6
Registration Fees		6
Administration Fees (Note C)		4
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		1
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fees — Class C (Note D)		—	@
Other Expenses		8
Total Expenses		228
Expenses Reimbursed by Adviser (Note B)		(159	)
Waiver of Advisory Fees (Note B)		(29	)
Reimbursement of Class Specific Expenses — Class A (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		37
Net Investment Income		114
Realized Loss:
Investments Sold		(67	)
Foreign Currency Forward Exchange Contracts		(1	)
Foreign Currency Translation		(1	)
Net Realized Loss		(69	)
Change in Unrealized Appreciation (Depreciation):
Investments		1,090
Foreign Currency Forward Exchange Contracts		8
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		1,098
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		1,029
Net Increase in Net Assets Resulting from Operations	$	1,143

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Real Assets Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Period from June 18, 2018^ to December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	114		$	132
Net Realized Loss		(69	)		(52	)
Net Change in Unrealized Appreciation (Depreciation)		1,098			(739	)
Net Increase (Decrease) in Net Assets Resulting from Operations		1,143			(659	)
Dividends and Distributions to Shareholders:
Class I		(35	)		(225	)
Class A		(—	@)		(—	@)
Class C		(—	@)		(—	@)
Class IS		(—	@)		(—	@)
Paid-in-Capital:
Class I		—			(56	)
Class A		—			(—	@)
Class C		—			(—	@)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		(35	)		(281	)
Capital Share Transactions:(1)
Class I:
Subscribed		6			9,970
Distributions Reinvested		35			—
Redeemed		(6	)		—
Class A:
Subscribed		10			10
Distributions Reinvested		—	@		—
Class C:
Subscribed		10			10
Distributions Reinvested		—	@		—
Class IS:
Subscribed		—			10
Distributions Reinvested		—	@		—
Net Increase in Net Assets Resulting from Capital Share Transactions		55			10,000
Total Increase in Net Assets		1,163			9,060
Net Assets:
Beginning of Period		9,060			—
End of Period	$	10,223		$	9,060
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		1			997
Shares Issued on Distributions Reinvested		3			—
Shares Redeemed		(1	)		—
Net Increase in Class I Shares Outstanding		3			997
Class A:
Shares Subscribed		1			1
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class A Shares Outstanding		1			1
Class C:
Shares Subscribed		1			1
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class C Shares Outstanding		1			1
Class IS:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class C Shares Outstanding		—	@@		1

^  Commencement of Operations.

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Real Assets Portfolio

	Class I
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.13
Net Realized and Unrealized Gain (Loss)		1.03			(0.79	)
Total from Investment Operations		1.14			(0.66	)
Distributions from and/or in Excess of:
Net Investment Income		(0.03	)		(0.22	)
Paid-in-Capital		—			(0.06	)
Total Distributions		(0.03	)		(0.28	)
Net Asset Value, End of Period	$	10.17		$	9.06
Total Return(3)		12.64	%(5)		(6.70	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10,172		$	9,033
Ratio of Expenses Before Expense Limitation		4.61	%(6)		4.76	%(6)
Ratio of Expenses After Expense Limitation		0.76	%(4)(6)		0.76	%(4)(6)
Ratio of Net Investment Income		2.32	%(4)(6)		2.52	%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		44	%(5)		26	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Real Assets Portfolio

	Class A
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.11
Net Realized and Unrealized Gain (Loss)		1.01			(0.79	)
Total from Investment Operations		1.12			(0.68	)
Distributions from and/or in Excess of:
Net Investment Income		(0.03	)		(0.20	)
Paid-in-Capital		—			(0.06	)
Total Distributions		(0.03	)		(0.26	)
Net Asset Value, End of Period	$	10.15		$	9.06
Total Return(3)		12.37	%(5)		(6.90	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	20		$	9
Ratio of Expenses Before Expense Limitation		15.58	%(6)		22.79	%(6)
Ratio of Expenses After Expense Limitation		1.14	%(4)(6)		1.14	%(4)(6)
Ratio of Net Investment Income		2.28	%(4)(6)		2.18	%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		44	%(5)		26	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Real Assets Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.08			0.07
Net Realized and Unrealized Gain (Loss)		1.01			(0.79	)
Total from Investment Operations		1.09			(0.72	)
Distributions from and/or in Excess of:
Net Investment Income		(0.01	)		(0.16	)
Paid-in-Capital		—			(0.06	)
Total Distributions		(0.01	)		(0.22	)
Net Asset Value, End of Period	$	10.14		$	9.06
Total Return(3)		12.00	%(5)		(7.27	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	21		$	9
Ratio of Expenses Before Expense Limitation		18.84	%(6)		23.55	%(6)
Ratio of Expenses After Expense Limitation		1.89	%(4)(6)		1.89	%(4)(6)
Ratio of Net Investment Income		1.56	%(4)(6)		1.37	%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		44	%(5)		26	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Real Assets Portfolio

	Class IS
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 18, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	9.06		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.11			0.13
Net Realized and Unrealized Gain (Loss)		1.04			(0.79	)
Total from Investment Operations		1.15			(0.66	)
Distributions from and/or in Excess of:
Net Investment Income		(0.04	)		(0.22	)
Paid-in-Capital		—			(0.06	)
Total Distributions		(0.04	)		(0.28	)
Net Asset Value, End of Period	$	10.17		$	9.06
Total Return(3)		12.64	%(5)		(6.69	)%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10		$	9
Ratio of Expenses Before Expense Limitation		20.88	%(6)		22.53	%(6)
Ratio of Expenses After Expense Limitation		0.74	%(4)(6)		0.74	%(4)(6)
Ratio of Net Investment Income		2.34	%(4)(6)		2.53	%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)		0.01	%(6)
Portfolio Turnover Rate		44	%(5)		26	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Real Assets Portfolio. The Fund seeks total return, targeted to be in excess of inflation, through capital appreciation and current income.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued

at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") or Morgan Stanley Investment Management Limited ("MSIM Limited") and Morgan Stanley Investment Management Company ("MSIM Company") (together, the "Sub-Advisers"), effective April 30, 2019, MSIM Company is no longer Sub-Adviser to the Fund, each a wholly-owned subsidiary of Morgan Stanley, determine

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Fund invests a significant portion of its assets in securities of real estate investment trusts ("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 Fund.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	5	$	16	$	—	$	21
Auto Components		—		30		—		30
Banks		166		68		—		234
Beverages		43		41		—		84
Biotechnology		27		—		—		27
Capital Markets		14		18		—		32
Chemicals		30		45		—		75
Commercial Services & Supplies		18		17		—		35
Communications Equipment		13		—		—		13
Construction & Engineering		—		187		—		187
Consumer Finance		47		—		—		47
Distributors		14		—		—		14
Diversified Telecommunication Services		41		33		—		74
Electric Utilities		252		18		—		270
Electronic Equipment, Instruments & Components		17		—		—		17
Entertainment		39		—		—		39
Equity Real Estate Investment Trusts (REITs)		1,694		643		—		2,337
Food & Staples Retailing		—		48		—		48
Food Products		22		37		—		59
Gas Utilities		60		120		—		180
Health Care Equipment & Supplies		58		—		—		58
Health Care Providers & Services		33		—		—		33
Household Durables		22		—		—		22
Household Products		21		—		—		21
Independent Power & Renewable Electricity Producers		154		—		—		154
Industrial Conglomerates		—		38		—		38
Information Technology Services		47		13		—		60
Insurance		64		16		—		80
Interactive Media & Services		68		—		—		68
Internet & Direct Marketing Retail		45		—		—		45
Life Sciences Tools & Services		36		—		—		36
Machinery		51		14		—		65
Media		17		—		—		17
Metals & Mining		12		20		—		32
Multi-Line Retail		—		1		—		1
Multi-Utilities		203		105		—		308
Oil, Gas & Consumable Fuels		594		150		—		744
Personal Products		—		15		—		15
Pharmaceuticals		76		59		—		135

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)
Real Estate Management & Development	$	—	$	674		$	—	$	674
Road & Rail		43		—			—		43
Semiconductors & Semiconductor Equipment		52		—			—		52
Software		142		17			—		159
Specialty Retail		13		—			—		13
Tech Hardware, Storage & Peripherals		53		—			—		53
Trading Companies & Distributors		—		64			—		64
Transportation Infrastructure		169		301			—		470
Water Utilities		104		38			—		142
Total Common Stocks		4,579		2,846			—		7,425
U.S. Treasury Securities		—		2,533			—		2,533
Short-Term Investment
Investment Company		277		—			—		277
Total Assets		4,856		5,379			—		10,235
Liabilities:
Foreign Currency Forward Exchange Contract		—		—	@		—		—	@
Total	$	4,856	$	5,379		$	—	$	10,235

@ Value is less than $500.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.   Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Treasury Inflation-Protected Securities: The Fund may invest in Treasury Inflation-Protected Securities ("TIPS"), including structured bonds in which the principal amount is adjusted daily to keep pace with inflation, as measured by the U.S. Consumer Pricing Index for Urban Consumers. The adjustments to principal due to inflation/deflation are reflected as increases/decreases to interest income with a corresponding adjustment to cost. Such adjustments may have a significant impact on the Fund's distributions and may result in a return of capital to shareholders. The repayment of the original bond principal upon maturity is guaranteed by the full faith and credit of the U.S. Government.

5.  Derivatives: The Fund 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 Fund'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 Fund 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

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Exchange Commission rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser and/or Sub-Advisers seek to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund 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 may 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 Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund 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 Fund as unrealized gain or loss. The Fund 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" ("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 Funds use derivative instruments, how these derivative instruments are accounted for and their effects on a Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Foreign Currency Forward Exchange Contract	Unrealized Appreciation on Foreign Currency Forward Exchange Contract	Currency Risk	$	—	@

@ Value is less than $500.

The following tables set forth by primary risk exposure the Fund's realized gain(loss) and change in unrealized appreciation (depreciation) by type of derivative contract for the period ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contract	$	(1	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contract	$	8

At June 30, 2019, the Fund'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 Contract	$	—	@	$	—

@ Value is less than $500.

(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 Fund 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

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund 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 potential 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 Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
UBS AG	$	—	@	$	—	$	—	$	—	@

@ Value is less than $500.

For the period ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Foreign Currency Forward Exchange Contracts:
Average monthly principal amount	$	1,854,000

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

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

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. Non-cash dividends received in the form of stock, if any, are recognized on the ex-dividend date and recorded as non-cash dividend income at fair value. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

The Fund 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.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Agreement, paid quarterly, at the annual rate based on the daily net assets as follows:

First $1 billion			Over $1 billion
	0.60	%		0.55	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund 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, 1.15% for Class A shares, 1.90% for Class C shares and 0.75% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time that the Directors act to discontinue all or a portion of such waivers or reimbursements when they deem such action is appropriate. For the six months ended June 30, 2019, approximately $29,000 of advisory fees were waived and approximately $162,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

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

Effective April 30, 2019, MSIM Company is no longer Sub-Adviser to the Fund.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $2,795,000 and $4,047,000, respectively.

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

For the six months ended June 30, 2019, purchases and sales of long-term U.S. Government securities were approximately $1,689,000 and $265,000, respectively.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	307	$	1,236	$	1,266	$	4

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	277

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes.

The tax character of distributions paid during fiscal 2018 was as follows:

2018 Distributions Paid From:
Ordinary Income (000)		Paid-in- Capital (000)
$	225	$	56

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

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2018.

At December 31, 2018, the Fund had no distributable earnings on a tax basis.

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $61,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund did not have record owners of 10% or greater.

K. Accounting Pronouncement: In March 2017, FASB issued an Accounting Standard Update, ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities ("ASU 2017-08") which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. ASU 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be accreted to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Fund has adopted ASU 2017-08 as of June 30, 2019 and it did not have an impact on the Fund's financial statements.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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-Adviser, to the extent applicable. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser, Sub-Adviser and Administrator 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 considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the period since the end of June 2018, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

25

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

26

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

Adviser and Administrator

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

Sub-Adviser

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

Distributor

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

Dividend Disbursing and Transfer Agent

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

28

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIRASAN
2669074 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Inception Portfolio

(formerly Small Company Growth Portfolio)

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	7
Statement of Operations	9
Statements of Changes in Net Assets	10
Financial Highlights	12
Notes to Financial Statements	17
Investment Advisory Agreement Approval	27
Privacy Notice	29
Director and Officer Information	31

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Inception Portfolio (the "Fund") (formerly Small Company Growth Portfolio) performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Inception Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs, including redemption fees; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads) and redemption fees. Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
MSIF Inception Portfolio Class I	$	1,000.00	$	1,385.70	$	1,019.89	$	5.86	$	4.96		0.99	%
MSIF Inception Portfolio Class A		1,000.00		1,384.10		1,018.50		7.51		6.36		1.27
MSIF Inception Portfolio Class L		1,000.00		1,378.90		1,015.67		10.85		9.20		1.84
MSIF Inception Portfolio Class C		1,000.00		1,377.50		1,014.43		12.32		10.44		2.09
MSIF Inception Portfolio Class IS		1,000.00		1,386.00		1,020.23		5.44		4.61		0.92

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Inception Portfolio

	Shares		Value (000)
Common Stocks (94.0%)
Biotechnology (1.8%)
Alnylam Pharmaceuticals, Inc. (a)		13,035	$	946
Editas Medicine, Inc. (a)		43,626		1,079
Intellia Therapeutics, Inc. (a)		65,483		1,072
Moderna, Inc. (a)(b)		42,068		616
				3,713
Diversified Consumer Services (4.1%)
Chegg, Inc. (a)		170,977		6,598
ServiceMaster Global Holdings, Inc. (a)		38,077		1,983
				8,581
Health Care Equipment & Supplies (9.2%)
LivaNova PLC (a)		16,305		1,173
Penumbra, Inc. (a)		68,706		10,993
Quotient Ltd. (a)(b)		414,308		3,874
Shockwave Medical, Inc. (a)(b)		59,042		3,371
				19,411
Health Care Providers & Services (9.0%)
Covetrus, Inc. (a)		145,195		3,551
Guardant Health, Inc. (a)		93,296		8,054
HealthEquity, Inc. (a)		113,066		7,395
				19,000
Health Care Technology (5.4%)
Inspire Medical Systems, Inc. (a)		187,886		11,395
Hotels, Restaurants & Leisure (1.4%)
Vail Resorts, Inc.		13,208		2,948
Information Technology Services (10.0%)
LiveRamp Holdings, Inc. (a)		191,716		9,295
MongoDB, Inc. (a)		55,233		8,400
Wix.com Ltd. (Israel) (a)		24,406		3,468
				21,163
Insurance (1.9%)
Trupanion, Inc. (a)(b)		114,147		4,124
Internet & Direct Marketing Retail (10.5%)
Etsy, Inc. (a)		104,524		6,415
Farfetch Ltd., Class A (a)		139,033		2,892
MakeMyTrip Ltd. (a)		130,890		3,246
Overstock.com, Inc. (a)(b)		205,990		2,801
RealReal, Inc. (The) (a)		99,378		2,872
Stitch Fix, Inc., Class A (a)(b)		121,869		3,899
				22,125
Life Sciences Tools & Services (7.1%)
Adaptive Biotechnologies Corp. (a)		41,228		1,991
NanoString Technologies, Inc. (a)		425,955		12,928
				14,919

	Shares		Value (000)
Pharmaceuticals (1.3%)
Intersect ENT, Inc. (a)		123,927	$	2,820
Professional Services (3.3%)
Upwork, Inc. (a)		432,643		6,957
Real Estate Management & Development (1.6%)
Redfin Corp. (a)		193,761		3,484
Software (21.1%)
Appian Corp. (a)		83,243		3,003
Avalara, Inc. (a)		119,642		8,638
Coupa Software, Inc. (a)		68,177		8,632
Elastic N.V. (a)(b)		87,198		6,510
Instructure, Inc. (a)		72,287		3,072
Pagerduty, Inc. (a)(b)		62,123		2,923
Smartsheet, Inc., Class A (a)		171,392		8,295
Xero Ltd. (New Zealand) (a)		84,760		3,565
				44,638
Textiles, Apparel & Luxury Goods (1.5%)
Brunello Cucinelli SpA (Italy)		95,324		3,215
Thrifts & Mortgage Finance (3.1%)
LendingTree, Inc. (a)		15,381		6,460
Trading Companies & Distributors (1.7%)
EVI Industries, Inc. (b)		92,830		3,553
Total Common Stocks (Cost $154,605)				198,506
Preferred Stocks (5.1%)
Health Care Technology (3.7%)
Grand Rounds, Inc. Series B (a)(c)(d)(e) (acquisition cost — $3,362; acquired 7/3/14)		3,269,139		7,813
Software (1.4%)
Lookout, Inc. Series F (a)(c)(d)(e) (acquisition cost — $13,476; acquired 6/17/14)		1,179,743		2,926
Total Preferred Stocks (Cost $16,838)				10,739
Short-Term Investments (24.6%)
Securities held as Collateral on Loaned Securities (8.5%)
Investment Company (6.5%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G)		13,859,305		13,859

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Inception Portfolio

	Face Amount (000)		Value (000)
Repurchase Agreements (2.0%)
Barclays Capital, Inc., (2.50%, dated 6/28/19, due 7/1/19; proceeds $642; fully collateralized by a U.S. Government obligation; 3.63% due 2/15/44; valued at $655)	$	642	$	642
Merrill Lynch & Co., Inc., (2.48%, dated 6/28/19, due 7/1/19; proceeds $3,595; fully collateralized by U.S. Government obligations; 2.13% - 2.50% due 2/15/41 - 5/15/46; valued at $3,666)		3,594		3,594
				4,236
Total Securities held as Collateral on Loaned Securities (Cost $18,095)				18,095
	Shares
Investment Company (16.1%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $33,934)		33,933,748		33,934
Total Short-Term Investments (Cost $52,029)				52,029
Total Investments Excluding Purchased Options (123.7%) (Cost $223,472)				261,274
Total Purchased Options Outstanding (0.1%) (Cost $1,037)				277
Total Investments (123.8%) (Cost $224,509) Including $21,677 of Securities Loaned (f)(g)				261,551
Liabilities in Excess of Other Assets (–23.8%)				(50,356	)
Net Assets (100.0%)			$	211,195

(a)  Non-income producing security.

(b)  All or a portion of this security was on loan at June 30, 2019.

(c)  At June 30, 2019, the Fund held fair valued securities valued at approximately $10,739,000, representing 5.1% 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 Company's (as defined herein) Directors.

(d)  Security has been deemed illiquid at June 30, 2019.

(e)  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 Fund 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, 2019 amounts to approximately $10,739,000 and represents 5.1% of net assets.

(f)  The approximate fair value and percentage of net assets, $6,780,000 and 3.2%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(g)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $57,480,000 and the aggregate gross unrealized depreciation is approximately $20,438,000, resulting in net unrealized appreciation of approximately $37,042,000.

Call Options Purchased:

The Fund had the following call options purchased open at June 30, 2019:

Counterparty	Description	Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)			Premiums Paid (000)		Unrealized Depreciation (000)
BNP Paribas	USD/CNH	CNH	7.58	Jan-20		42,271,883		42,272	$	98		$	217	$	(119	)
Royal Bank of Scotland	USD/CNH	CNH	7.78	Jul-19		61,460,957		61,461		—	@		299		(299	)
Royal Bank of Scotland	USD/CNH	CNH	7.85	Jun-20		47,224,306		47,224		154			244		(90	)
Royal Bank of Scotland	USD/CNH	CNH	8.00	Oct-19		47,079,506		47,080		25			277		(252	)
									$	277		$	1,037	$	(760	)

@    Value is less than $500.

CNH  Chinese Yuan Renminbi Offshore

USD    United States Dollar

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Inception Portfolio

Portfolio Composition*

Classification	Percentage of Total Investments
Software		19.6	%
Other**		18.9
Short-Term Investments		13.9
Internet & Direct Marketing Retail		9.1
Information Technology Services		8.7
Health Care Equipment & Supplies		8.0
Health Care Technology		7.9
Health Care Providers & Services		7.8
Life Sciences Tools & Services		6.1
Total Investments		100.0	%

*  Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2019.

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

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Inception Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $176,716)	$	213,758
Investment in Security of Affiliated Issuer, at Value (Cost $47,793)		47,793
Total Investments in Securities, at Value (Cost $224,509)		261,551
Foreign Currency, at Value (Cost $1)		1
Cash from Securities Lending		105
Receivable for Investments Sold		29,246
Receivable for Fund Shares Sold		328
Receivable from Securities Lending Income		162
Receivable from Affiliate		24
Other Assets		130
Total Assets		291,547
Liabilities:
Payable for Fund Shares Redeemed		37,163
Payable for Investments Purchased		24,344
Collateral on Securities Loaned, at Value		18,200
Payable for Advisory Fees		411
Due to Broker		80
Payable for Professional Fees		58
Payable for Sub Transfer Agency Fees — Class I		18
Payable for Sub Transfer Agency Fees — Class A		3
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Administration Fees		16
Payable for Shareholder Services Fees — Class A		10
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Transfer Agency Fees — Class I		3
Payable for Transfer Agency Fees — Class A		3
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		1
Payable for Custodian Fees		2
Other Liabilities		38
Total Liabilities		80,352
Net Assets	$	211,195
Net Assets Consist of:
Paid-in-Capital	$	151,244
Total Distributable Earnings		59,951
Net Assets	$	211,195

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Inception Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	90,916
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		6,809,478
Net Asset Value, Offering and Redemption Price Per Share	$	13.35
CLASS A:
Net Assets	$	49,845
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		4,682,290
Net Asset Value, Redemption Price Per Share	$	10.65
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.59
Maximum Offering Price Per Share	$	11.24
CLASS L:
Net Assets	$	1,505
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		153,441
Net Asset Value, Offering and Redemption Price Per Share	$	9.81
CLASS C:
Net Assets	$	573
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		54,961
Net Asset Value, Offering and Redemption Price Per Share	$	10.42
CLASS IS:
Net Assets	$	68,356
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		5,086,004
Net Asset Value, Offering and Redemption Price Per Share	$	13.44
(1) Including: Securities on Loan, at Value:	$	21,677

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Inception Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Income from Securities Loaned — Net	$	1,020
Dividends from Security of Affiliated Issuer (Note G)		145
Dividends from Securities of Unaffiliated Issuers (Net of $8 of Foreign Taxes Withheld)		58
Total Investment Income		1,223
Expenses:
Advisory Fees (Note B)		1,108
Administration Fees (Note C)		96
Shareholder Services Fees — Class A (Note D)		54
Distribution and Shareholder Services Fees — Class L (Note D)		5
Distribution and Shareholder Services Fees — Class C (Note D)		1
Professional Fees		54
Sub Transfer Agency Fees — Class I		26
Sub Transfer Agency Fees — Class A		18
Sub Transfer Agency Fees — Class L		—	@
Sub Transfer Agency Fees — Class C		—	@
Registration Fees		36
Shareholder Reporting Fees		29
Transfer Agency Fees — Class I (Note E)		4
Transfer Agency Fees — Class A (Note E)		4
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		2
Custodian Fees (Note F)		8
Directors' Fees and Expenses		6
Pricing Fees		2
Other Expenses		19
Total Expenses		1,474
Waiver of Advisory Fees (Note B)		(235	)
Rebate from Morgan Stanley Affiliate (Note G)		(12	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(2	)
Net Expenses		1,222
Net Investment Income		1
Realized Gain (Loss):
Investments Sold		26,603
Foreign Currency Translation		(—	@)
Net Realized Gain		26,603
Change in Unrealized Appreciation (Depreciation):
Investments		50,833
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		50,833
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		77,436
Net Increase in Net Assets Resulting from Operations	$	77,437

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Inception Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income (Loss)	$	1		$	(1,227	)
Net Realized Gain		26,603			49,960
Net Change in Unrealized Appreciation (Depreciation)		50,833			(38,830	)
Net Increase in Net Assets Resulting from Operations		77,437			9,903
Dividends and Distributions to Shareholders:
Class I		—			(7,933	)
Class A		—			(5,688	)
Class L		—			(196	)
Class C		—			(18	)
Class IS		—			(14,165	)
Total Dividends and Distributions to Shareholders		—			(28,000	)
Capital Share Transactions:(1)
Class I:
Subscribed		20,455			32,971
Distributions Reinvested		—			7,923
Redeemed		(14,007	)		(124,369	)
Class A:
Subscribed		9,973			6,959
Distributions Reinvested		—			5,498
Redeemed		(7,195	)		(13,251	)
Class L:
Distributions Reinvested		—			195
Redeemed		(88	)		(164	)
Class C:
Subscribed		391			145
Distributions Reinvested		—			17
Redeemed		—			(37	)
Class IS:
Subscribed		19,070			31,218
Distributions Reinvested		—			14,160
Redeemed		(101,987	)		(48,990	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(73,388	)		(87,725	)
Redemption Fees		11			6
Total Increase (Decrease) in Net Assets		4,060			(105,816	)
Net Assets:
Beginning of Period		207,135			312,951
End of Period	$	211,195		$	207,135

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Inception Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		1,620			2,843
Shares Issued on Distributions Reinvested		—			780
Shares Redeemed		(1,126	)		(10,329	)
Net Increase (Decrease) in Class I Shares Outstanding		494			(6,706	)
Class A:
Shares Subscribed		1,002			695
Shares Issued on Distributions Reinvested		—			678
Shares Redeemed		(768	)		(1,434	)
Net Increase (Decrease) in Class A Shares Outstanding		234			(61	)
Class L:
Shares Issued on Distributions Reinvested		—			26
Shares Redeemed		(10	)		(18	)
Net Increase (Decrease) in Class L Shares Outstanding		(10	)		8
Class C:
Shares Subscribed		40			14
Shares Issued on Distributions Reinvested		—			2
Shares Redeemed		—			(4	)
Net Increase in Class C Shares Outstanding		40			12
Class IS:
Shares Subscribed		1,549			2,514
Shares Issued on Distributions Reinvested		—			1,384
Shares Redeemed		(7,912	)		(4,233	)
Net Decrease in Class IS Shares Outstanding		(6,363	)		(335	)

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Inception Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	9.62		$	10.90		$	13.26		$	13.75		$	16.50		$	20.55
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.00	(3)		(0.05	)		(0.11	)		0.00	(3)		(0.05	)		(0.06	)
Net Realized and Unrealized Gain (Loss)		3.73			0.16			2.91			(0.05	)		(1.51	)		(2.04	)
Total from Investment Operations		3.73			0.11			2.80			(0.05	)		(1.56	)		(2.10	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.39	)		(5.16	)		(0.44	)		(1.19	)		(1.95	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	13.35		$	9.62		$	10.90		$	13.26		$	13.75		$	16.50
Total Return(4)		38.57	%(8)		0.29	%		21.87	%		(0.35	)%		(9.58	)%		(9.68	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	90,916		$	60,777		$	141,954		$	305,945		$	718,386		$	1,156,812
Ratio of Expenses Before Expense Limitation		1.20	%(9)		1.17	%		1.20	%		1.17	%		1.11	%		1.13	%
Ratio of Expenses After Expense Limitation		0.99	%(5)(9)		0.98	%(5)		0.99	%(5)		1.02	%(5)(6)		1.05	%(5)		1.05	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			0.98	%(5)		0.99	%(5)		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		0.04	%(5)(9)		(0.41	)%(5)		(0.77	)%(5)		0.02	%(5)		(0.29	)%(5)		(0.34	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		48	%(8)		79	%		97	%		51	%		42	%		53	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2016, 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, 2016, the maximum ratio was 1.05% for Class I shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Inception Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	7.68		$	8.99		$	11.72		$	12.25		$	14.89		$	18.83
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.01	)		(0.07	)		(0.14	)		(0.04	)		(0.09	)		(0.11	)
Net Realized and Unrealized Gain (Loss)		2.98			0.15			2.57			(0.05	)		(1.36	)		(1.88	)
Total from Investment Operations		2.97			0.08			2.43			(0.09	)		(1.45	)		(1.99	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.39	)		(5.16	)		(0.44	)		(1.19	)		(1.95	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	10.65		$	7.68		$	8.99		$	11.72		$	12.25		$	14.89
Total Return(4)		38.41	%(8)		0.02	%		21.57	%		(0.73	)%		(9.88	)%		(9.98	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	49,845		$	34,166		$	40,531		$	87,864		$	136,621		$	186,307
Ratio of Expenses Before Expense Limitation		1.48	%(9)		1.44	%		1.51	%		1.45	%		1.38	%		N/A
Ratio of Expenses After Expense Limitation		1.27	%(5)(9)		1.25	%(5)		1.34	%(5)		1.37	%(5)(6)		1.37	%(5)		1.38	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			1.25	%(5)		1.34	%(5)		N/A			N/A			N/A
Ratio of Net Investment Loss		(0.24	)%(5)(9)		(0.69	)%(5)		(1.12	)%(5)		(0.35	)%(5)		(0.61	)%(5)		(0.67	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		48	%(8)		79	%		97	%		51	%		42	%		53	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.35% for Class A shares. Prior to July 1, 2016, the maximum ratio was 1.40% for Class A shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Inception Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	7.10		$	8.46		$	11.34		$	11.92		$	14.60		$	18.60
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.04	)		(0.11	)		(0.19	)		(0.10	)		(0.16	)		(0.19	)
Net Realized and Unrealized Gain (Loss)		2.75			0.14			2.47			(0.04	)		(1.33	)		(1.86	)
Total from Investment Operations		2.71			0.03			2.28			(0.14	)		(1.49	)		(2.05	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.39	)		(5.16	)		(0.44	)		(1.19	)		(1.95	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	9.81		$	7.10		$	8.46		$	11.34		$	11.92		$	14.60
Total Return(4)		37.89	%(8)		(0.58	)%		20.95	%		(1.17	)%		(10.36	)%		(10.43	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	1,505		$	1,157		$	1,310		$	1,524		$	1,874		$	2,370
Ratio of Expenses Before Expense Limitation		2.11	%(9)		2.07	%		2.27	%		2.21	%		2.10	%		2.02	%
Ratio of Expenses After Expense Limitation		1.84	%(5)(9)		1.84	%(5)		1.84	%(5)		1.87	%(5)(6)		1.90	%(5)		1.90	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			1.84	%(5)		1.84	%(5)		N/A			N/A			N/A
Ratio of Net Investment Loss		(0.82	)%(5)(9)		(1.28	)%(5)		(1.61	)%(5)		(0.88	)%(5)		(1.33	)%(5)		(1.16	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		48	%(8)		79	%		97	%		51	%		42	%		53	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Loss would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment loss.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.85% for Class L shares. Prior to July 1, 2016, the maximum ratio was 1.90% for Class L shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Inception Portfolio

	Class C
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Year Ended December 31, 2018			Period from May 31, 2017(1) to December 31, 2017
Net Asset Value, Beginning of Period	$	7.55		$	8.93		$	13.59
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.05	)		(0.03	)		(0.13	)
Net Realized and Unrealized Gain		2.92			0.04			0.63
Total from Investment Operations		2.87			0.01			0.50
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.39	)		(5.16	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	10.42		$	7.55		$	8.93
Total Return(4)		37.75	%(7)		(0.78	)%		4.36	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	573		$	116		$	30
Ratio of Expenses Before Expense Limitation		2.77	%(8)		4.73	%		21.29	%(8)
Ratio of Expenses After Expense Limitation		2.09	%(5)(8)		2.09	%(5)		2.10	%(5)(8)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			2.09	%(5)		2.10	%(5)(8)
Ratio of Net Investment Loss		(1.02	)%(5)(8)		(1.50	)%(5)		(1.82	)%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)		0.01	%		0.00	%(6)(8)
Portfolio Turnover Rate		48	%(7)		79	%		97	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Inception Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	9.69		$	10.96		$	13.29		$	13.77		$	16.51		$	20.55
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.00	(3)		(0.04	)		(0.10	)		0.01			(0.03	)		(0.03	)
Net Realized and Unrealized Gain (Loss)		3.75			0.16			2.93			(0.05	)		(1.52	)		(2.06	)
Total from Investment Operations		3.75			0.12			2.83			(0.04	)		(1.55	)		(2.09	)
Distributions from and/or in Excess of:
Net Realized Gain		—			(1.39	)		(5.16	)		(0.44	)		(1.19	)		(1.95	)
Redemption Fees		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)		0.00	(3)
Net Asset Value, End of Period	$	13.44		$	9.69		$	10.96		$	13.29		$	13.77		$	16.51
Total Return(4)		38.60	%(8)		0.38	%		22.08	%		(0.28	)%		(9.52	)%		(9.63	)%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	68,356		$	110,919		$	129,126		$	361,586		$	660,134		$	671,885
Ratio of Expenses Before Expense Limitation		1.13	%(9)		1.11	%		1.09	%		1.03	%		0.99	%		0.98	%
Ratio of Expenses After Expense Limitation		0.92	%(5)(9)		0.92	%(5)		0.92	%(5)		0.95	%(5)(6)		0.98	%(5)		0.97	%(5)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			0.92	%(5)		0.92	%(5)		N/A			N/A			N/A
Ratio of Net Investment Income (Loss)		0.08	%(5)(9)		(0.36	)%(5)		(0.71	)%(5)		0.08	%(5)		(0.21	)%(5)		(0.17	)%(5)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(9)		0.01	%		0.01	%		0.00	%(7)		0.00	%(7)		0.00	%(7)
Portfolio Turnover Rate		48	%(8)		79	%		97	%		51	%		42	%		53	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2016, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.93% for Class IS shares. Prior to July 1, 2016, the maximum ratio was 0.98% for Class IS shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Inception Portfolio (name changed on February 11, 2019, formerly Small Company Growth Portfolio). The Fund seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of small capitalization companies.

The Fund offers five classes of shares — Class I, Class A, Class L, Class C and Class IS. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

1.  Security Valuation: (1) An equity portfolio security listed or traded on an exchange is valued at its latest re-

ported sales price (or at the exchange official closing price if such exchange reports an official closing price), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) 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

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

be fair valued at the mean between its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (5) 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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services,

quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's investments as of June 30, 2019:

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
Biotechnology	$	3,713	$	—	$	—	$	3,713
Diversified Consumer Services		8,581		—		—		8,581
Health Care Equipment & Supplies		19,411		—		—		19,411
Health Care Providers & Services		19,000		—		—		19,000
Health Care Technology		11,395		—		—		11,395
Hotels, Restaurants & Leisure		2,948		—		—		2,948
Information Technology Services		21,163		—		—		21,163
Insurance		4,124		—		—		4,124
Internet & Direct Marketing Retail		22,125		—		—		22,125
Life Sciences Tools & Services		14,919		—		—		14,919
Pharmaceuticals		2,820		—		—		2,820
Professional Services		6,957		—		—		6,957
Real Estate Management & Development		3,484		—		—		3,484
Software		41,073		3,565		—		44,638
Textiles, Apparel & Luxury Goods		—		3,215		—		3,215
Thrifts & Mortgage Finance		6,460		—		—		6,460
Trading Companies & Distributors		3,553		—		—		3,553
Total Common Stocks		191,726		6,780		—		198,506
Preferred Stocks
Health Care Technology		—		—		7,813		7,813
Software		—		—		2,926		2,926
Total Preferred Stocks		—		—		10,739		10,739
Call Options Purchased		—		277		—		277

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Short-Term Investments
Investment Company		47,793		—		—		47,793
Repurchase Agreements		—		4,236		—		4,236
Total Short-Term Investments		47,793		4,236		—		52,029
Total Assets	$	239,519	$	11,293	$	10,739	$	261,551

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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

	Preferred Stocks (000)
Beginning Balance	$	11,150
Purchases		—
Sales
Amortization of discount		—
Transfers in		—
Transfers out
Corporate actions
Change in unrealized appreciation (depreciation)		(411	)
Realized gains (losses)
Ending Balance	$	10,739
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2019	$	(411	)

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (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, 2019. Various valuation techniques were used in the valuation of certain investments and weighted based on the level of significance. The Fund calculated the weighted averages of the unobservable inputs relative to each investment's fair value as of June 30, 2019.

	Fair Value at June 30, 2019 (000)		Valuation Technique	Unobservable Input	Amount or Range/ Weighted Average*			Impact to Valuation from an Increase in Input**
Preferred Stocks	$	10,739	Discounted Cash Flow	Weighted Average Cost of Capital	15.0%–19.5%/16.7%			Decrease
				Perpetual Growth Rate	3.0%–4.0%/3.5%			Increase
			Market Comparable Companies	Enterprise Value/Revenue	1.8x–10.6x/5.3x			Increase
				Discount for Lack of Marketability	19.0%–20.0%/19.3%			Decrease
			Comparable Transactions	Enterprise Value/Revenue		3.3	x	Increase

*  Amount is indicative of the weighted average.

**  Represents the expected directional change in the fair value of the Level 3 investments that would result from an increase in the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs could result in significantly higher or lower fair value measurements.

3.  Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are

maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

5.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund 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 in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund 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 Fund 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" ("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 Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	277	(a)

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2019 in accordance with ASC 815:

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(294	)(b)

(b) Amounts are included in Investments Sold in the Statement of Operations.

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(50	)(c)

(c) Amounts are included in Investments in the Statement of Operations.

At June 30, 2019, the Fund's derivative assets and liabilities are as follows:

Gross Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
Derivatives	Assets(d) (000)			Liabilities(d) (000)
Purchased Options	$	277	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(d) 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 Fund 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 Fund 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 potential 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

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

improves legal certainty. Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities(a) (000)		Financial Instrument (000)		Collateral Received(e) (000)			Net Amount (not less than $0) (000)
BNP Paribas	$	179	$	—	$	—		$	179
Royal Bank of Scotland		98		—		(80	)		18
Total	$	277	$	—	$	(80	)	$	197

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(e) 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, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	158,683,000

6.  Securities Lending: The Fund 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 Fund. The Fund 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 Fund'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 Fund has the right under the securities 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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	21,677	(f)	$	—	$	(21,677	)(g)(h)	$	0

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

(g) The Fund received cash collateral of approximately $18,200,000, of which approximately $18,095,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2019, there was uninvested cash of approximately $105,000, which is not reflected in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $3,729,000 in the form of U.S. Government obligations, which the Fund cannot sell or repledge, and accordingly are not reflected in the Portfolio of Investments.

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

FASB ASC 860, "Transfers & Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures", is intended to provide increased transparency about the types of collateral pledged in securities lending transactions and other similar transactions that are accounted for as secured borrowing.

The following table displays a breakdown of transactions accounted for as secured borrowings, the gross obligations

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

by class of collateral pledged and the remaining contractual maturity of those transactions as of June 30, 2019:

Remaining Contractual Maturity of the Agreements
	Overnight and Continuous (000)		<30 days (000)		Between 30 & 90 days (000)		>90 days (000)		Total (000)
Securities Lending Transactions
Common Stocks	$	18,200	$	—	$	—	$	—	$	18,200
Total Borrowings	$	18,200	$	—	$	—	$	—	$	18,200
Gross amount of recognized liabilities for securities lending transactions									$	18,200

7.  Restricted Securities: The Fund 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 Fund 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 Fund, 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 Fund can 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 the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

8.  Redemption Fees: The Fund will assess a 2% redemption fee on Class I shares, Class A shares, Class L shares, Class C shares and Class IS shares, which is paid directly to the Fund, for shares redeemed or exchanged within thirty days of purchase, subject to certain exceptions. The redemption fee is designed to protect the Fund and its remaining shareholders from the effects of short-term trading. These fees, if any, are included in the Statements of Changes in Net Assets.

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

10.  Dividends and Distributions to Shareholders: Dividends 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.

11.  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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $1 billion			Next $500 million			Next $500 million			Over $2 billion
	0.92	%		0.85	%		0.80	%		0.75	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.71% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 1.85% for Class L shares, 2.10% for Class C shares and 0.93% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

the six months ended June 30, 2019, approximately $235,000 of advisory fees were waived and approximately $5,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for

providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $108,427,000 and $185,457,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $12,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	26,481	$	126,216	$	104,904	$	145

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	47,793

25

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to

short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	9,040	$	18,960	$	27,098	$	109,125

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 in 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 equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Accumulated Loss (000)			Paid-in- Capital (000)
$	(7,162	)	$	7,162

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	—	$	201

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 42.3%.

26

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the three- and five-year periods but better than 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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's contractual management fee was higher than its peer group average, the actual management fee was lower than its peer group average and the total expense ratio was higher than but close to its peer group average. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

28

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

29

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

30

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

31

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFISCGSAN
2668885 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

US Core Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	6
Statements of Changes in Net Assets	7
Financial Highlights	8
Notes to Financial Statements	12
Investment Advisory Agreement Approval	17
Privacy Notice	19
Director and Officer Information	21

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in US Core Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

US Core Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
US Core Portfolio Class I	$	1,000.00	$	1,208.40	$	1,020.88	$	4.33	$	3.96		0.79	%
US Core Portfolio Class A		1,000.00		1,207.20		1,019.19		6.18		5.66		1.13
US Core Portfolio Class C		1,000.00		1,201.70		1,015.37		10.37		9.49		1.90
US Core Portfolio Class IS		1,000.00		1,209.60		1,021.08		4.11		3.76		0.75

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

US Core Portfolio

	Shares		Value (000)
Common Stocks (98.1%)
Banks (9.5%)
JPMorgan Chase & Co.		5,068	$	567
SVB Financial Group (a)		1,655		372
Texas Capital Bancshares, Inc. (a)		5,971		366
				1,305
Beverages (1.1%)
Monster Beverage Corp. (a)		2,387		152
Building Products (3.7%)
Fortune Brands Home & Security, Inc.		8,900		508
Capital Markets (6.0%)
Ameriprise Financial, Inc.		2,429		352
Goldman Sachs Group, Inc. (The)		747		153
Northern Trust Corp.		3,467		312
				817
Chemicals (1.0%)
International Flavors & Fragrances, Inc.		970		141
Electric Utilities (4.1%)
American Electric Power Co., Inc.		2,111		186
NextEra Energy, Inc.		1,858		380
				566
Electrical Equipment (0.7%)
Emerson Electric Co.		1,495		100
Equity Real Estate Investment Trusts (REITs) (10.4%)
Essex Property Trust, Inc. REIT		1,328		388
Extra Space Storage, Inc. REIT		2,482		263
STORE Capital Corp. REIT		12,542		416
Welltower, Inc. REIT		4,401		359
				1,426
Health Care Equipment & Supplies (5.2%)
Danaher Corp.		5,015		717
Health Care Providers & Services (2.1%)
Cigna Corp. (a)		1,795		283
Health Care Technology (1.1%)
Veeva Systems, Inc., Class A (a)		883		143
Hotels, Restaurants & Leisure (7.7%)
McDonald's Corp.		2,550		529
Starbucks Corp.		6,226		522
				1,051
Household Durables (3.2%)
Lennar Corp., Class A		9,053		439
Information Technology Services (8.3%)
Mastercard, Inc., Class A		3,766		996
PayPal Holdings, Inc. (a)		1,219		140
				1,136
Interactive Media & Services (2.3%)
Alphabet, Inc., Class A (a)		288		312

	Shares		Value (000)
Media (0.6%)
Comcast Corp., Class A		1,915	$	81
Oil, Gas & Consumable Fuels (4.6%)
Continental Resources, Inc. (a)		4,423		186
Diamondback Energy, Inc.		4,065		443
				629
Personal Products (4.0%)
Estee Lauder Cos., Inc. (The), Class A		2,948		540
Software (14.8%)
Microsoft Corp.		9,511		1,274
Palo Alto Networks, Inc. (a)		1,480		301
VMware, Inc., Class A		2,683		449
				2,024
Specialty Retail (2.4%)
Home Depot, Inc. (The)		1,600		333
Tech Hardware, Storage & Peripherals (5.3%)
Apple, Inc.		3,624		717
Total Common Stocks (Cost $10,663)				13,420
Short-Term Investment (1.7%)
Investment Company (1.7%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $235)		234,621		235
Total Investments (99.8%) (Cost $10,898) (b)				13,655
Other Assets in Excess of Liabilities (0.2%)				30
Net Assets (100.0%)			$	13,685

(a)  Non-income producing security.

(b)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $2,869,000 and the aggregate gross unrealized depreciation is approximately $112,000, resulting in net unrealized appreciation of approximately $2,757,000.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		32.7	%
Software		14.8
Equity Real Estate Investment Trusts (REITs)		10.4
Banks		9.6
Information Technology Services		8.3
Hotels, Restaurants & Leisure		7.7
Capital Markets		6.0
Tech Hardware, Storage & Peripherals		5.3
Health Care Equipment & Supplies		5.2
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.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

US Core Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $10,663)	$	13,420
Investment in Security of Affiliated Issuer, at Value (Cost $235)		235
Total Investments in Securities, at Value (Cost $10,898)		13,655
Due from Adviser		20
Dividends Receivable		10
Receivable from Affiliate		—	@
Other Assets		65
Total Assets		13,750
Liabilities:
Payable for Professional Fees		49
Payable for Fund Shares Redeemed		9
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class C		2
Payable for Custodian Fees		1
Payable for Administration Fees		1
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Sub Transfer Agency Fees — Class I		—	@
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Other Liabilities		2
Total Liabilities		65
Net Assets	$	13,685
Net Assets Consist of:
Paid-in-Capital	$	10,726
Total Distributable Earnings		2,959
Net Assets	$	13,685
CLASS I:
Net Assets	$	9,079
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		690,181
Net Asset Value, Offering and Redemption Price Per Share	$	13.16
CLASS A:
Net Assets	$	2,495
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		190,323
Net Asset Value, Redemption Price Per Share	$	13.11
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.73
Maximum Offering Price Per Share	$	13.84
CLASS C:
Net Assets	$	2,098
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		163,077
Net Asset Value, Offering and Redemption Price Per Share	$	12.87
CLASS IS:
Net Assets	$	13
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	13.16

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

US Core Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers	$	96
Dividends from Security of Affiliated Issuer (Note G)		2
Total Investment Income		98
Expenses:
Professional Fees		49
Advisory Fees (Note B)		38
Registration Fees		19
Shareholder Services Fees — Class A (Note D)		3
Distribution and Shareholder Services Fees — Class C (Note D)		10
Shareholder Reporting Fees		6
Administration Fees (Note C)		5
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Directors' Fees and Expenses		3
Custodian Fees (Note F)		2
Sub Transfer Agency Fees — Class I		1
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class C		—	@
Pricing Fees		1
Other Expenses		4
Total Expenses		146
Expenses Reimbursed by Adviser (Note B)		(43	)
Waiver of Advisory Fees (Note B)		(38	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		64
Net Investment Income		34
Realized Gain:
Investments Sold		228
Change in Unrealized Appreciation (Depreciation):
Investments		2,039
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		2,267
Net Increase in Net Assets Resulting from Operations	$	2,301

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

US Core Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	34		$	84
Net Realized Gain		228			298
Net Change in Unrealized Appreciation (Depreciation)		2,039			(1,769	)
Net Increase (Decrease) in Net Assets Resulting from Operations		2,301			(1,387	)
Dividends and Distributions to Shareholders:
Class I		—			(115	)
Class A		—			(20	)
Class C		—			(16	)
Class IS		—			(—	@)
Total Dividends and Distributions to Shareholders		—			(151	)
Capital Share Transactions:(1)
Class I:
Subscribed		194			1,070
Distributions Reinvested		—			34
Redeemed		(209	)		(1,470	)
Class A:
Subscribed		861			503
Distributions Reinvested		—			19
Redeemed		(595	)		(315	)
Class C:
Subscribed		325			227
Distributions Reinvested		—			16
Redeemed		(131	)		(289	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		445			(205	)
Total Increase (Decrease) in Net Assets		2,746			(1,743	)
Net Assets:
Beginning of Period		10,939			12,682
End of Period	$	13,685		$	10,939
(1)  Capital Share Transactions:
Class I:
Shares Subscribed		16			88
Shares Issued on Distributions Reinvested		—			3
Shares Redeemed		(18	)		(122	)
Net Decrease in Class I Shares Outstanding		(2	)		(31	)
Class A:
Shares Subscribed		71			41
Shares Issued on Distributions Reinvested		—			2
Shares Redeemed		(49	)		(26	)
Net Increase in Class A Shares Outstanding		22			17
Class C:
Shares Subscribed		28			20
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(11	)		(24	)
Net Increase (Decrease) in Class C Shares Outstanding		17			(3	)

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

US Core Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.89		$	12.41		$	10.45		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.11			0.08			0.07
Net Realized and Unrealized Gain (Loss)		2.22			(1.47	)		1.94			0.48
Total from Investment Operations		2.27			(1.36	)		2.02			0.55
Distributions from and/or in Excess of:
Net Investment Income		—			(0.05	)		(0.05	)		(0.10	)
Net Realized Gain		—			(0.11	)		—			—
Paid-in-Capital		—			—			(0.01	)		—
Total Distributions		—			(0.16	)		(0.06	)		(0.10	)
Net Asset Value, End of Period	$	13.16		$	10.89		$	12.41		$	10.45
Total Return(3)		20.84	%(6)		(11.00	)%		19.33	%		5.50	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	9,079		$	7,532		$	8,965		$	7,314
Ratio of Expenses Before Expense Limitation		2.07	%(7)		2.31	%		2.78	%		3.62	%(7)
Ratio of Expenses After Expense Limitation		0.79	%(4)(7)		0.80	%(4)		0.78	%(4)		0.77	%(4)(7)
Ratio of Net Investment Income		0.77	%(4)(7)		0.86	%(4)		0.68	%(4)		1.12	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		46	%(6)		60	%		57	%		28	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

US Core Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.86		$	12.38		$	10.44		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.03			0.07			0.04			0.04
Net Realized and Unrealized Gain (Loss)		2.22			(1.47	)		1.92			0.49
Total from Investment Operations		2.25			(1.40	)		1.96			0.53
Distributions from and/or in Excess of:
Net Investment Income		—			(0.01	)		(0.01	)		(0.09	)
Net Realized Gain		—			(0.11	)		—			—
Paid-in-Capital		—			—			(0.01	)		—
Total Distributions		—			(0.12	)		(0.02	)		(0.09	)
Net Asset Value, End of Period	$	13.11		$	10.86		$	12.38		$	10.44
Total Return(3)		20.72	%(6)		(11.35	)%		18.80	%		5.30	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,495		$	1,833		$	1,874		$	1,406
Ratio of Expenses Before Expense Limitation		2.41	%(7)		2.68	%		3.23	%		4.12	%(7)
Ratio of Expenses After Expense Limitation		1.13	%(4)(7)		1.15	%(4)		1.15	%(4)		1.15	%(4)(7)
Ratio of Net Investment Income		0.42	%(4)(7)		0.55	%(4)		0.31	%(4)		0.66	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		46	%(6)		60	%		57	%		28	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

US Core Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.70		$	12.28		$	10.41		$	10.00
Income (Loss) from Investment Operations:
Net Investment Loss(2)		(0.02	)		(0.03	)		(0.05	)		(0.00	)(3)
Net Realized and Unrealized Gain (Loss)		2.19			(1.44	)		1.92			0.48
Total from Investment Operations		2.17			(1.47	)		1.87			0.48
Distributions from and/or in Excess of:
Net Investment Income		—			—			—			(0.07	)
Net Realized Gain		—			(0.11	)		—			—
Total Distributions		—			(0.11	)		—			(0.07	)
Net Asset Value, End of Period	$	12.87		$	10.70		$	12.28		$	10.41
Total Return(4)		20.17	%(7)		(11.94	)%		17.96	%		4.79	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,098		$	1,563		$	1,831		$	1,377
Ratio of Expenses Before Expense Limitation		3.17	%(8)		3.44	%		3.94	%		4.99	%(8)
Ratio of Expenses After Expense Limitation		1.90	%(5)(8)		1.90	%(5)		1.90	%(5)		1.90	%(5)(8)
Ratio of Net Investment Loss		(0.34	)%(5)(8)		(0.22	)%(5)		(0.43	)%(5)		(0.05	)%(5)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)(8)
Portfolio Turnover Rate		46	%(7)		60	%		57	%		28	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Loss reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

US Core Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.88		$	12.41		$	10.45		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.12			0.08			0.07
Net Realized and Unrealized Gain (Loss)		2.23			(1.48	)		1.94			0.48
Total from Investment Operations		2.28			(1.36	)		2.02			0.55
Distributions from and/or in Excess of:
Net Investment Income		—			(0.06	)		(0.01	)		(0.10	)
Net Realized Gain		—			(0.11	)		—			—
Paid-in-Capital		—			—			(0.05	)		—
Total Distributions		—			(0.17	)		(0.06	)		(0.10	)
Net Asset Value, End of Period	$	13.16		$	10.88		$	12.41		$	10.45
Total Return(3)		20.96	%(6)		(11.04	)%		19.37	%		5.52	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13		$	11		$	12		$	10
Ratio of Expenses Before Expense Limitation		16.98	%(7)		16.44	%		19.96	%		19.22	%(7)
Ratio of Expenses After Expense Limitation		0.75	%(4)(7)		0.75	%(4)		0.75	%(4)		0.75	%(4)(7)
Ratio of Net Investment Income		0.81	%(4)(7)		0.92	%(4)		0.71	%(4)		1.17	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		46	%(6)		60	%		57	%		28	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the US Core Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (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

12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2   Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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 cir-

cumstances (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 Fund's investments as of June 30, 2019:

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
Banks	$	1,305	$	—	$	—	$	1,305
Beverages		152		—		—		152
Building Products		508		—		—		508
Capital Markets		817		—		—		817
Chemicals		141		—		—		141
Electric Utilities		566		—		—		566
Electrical Equipment		100		—		—		100
Equity Real Estate Investment Trusts (REITs)		1,426		—		—		1,426

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (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)
Health Care Equipment & Supplies	$	717	$	—	$	—	$	717
Health Care Providers & Services		283		—		—		283
Health Care Technology		143		—		—		143
Hotels, Restaurants & Leisure		1,051		—		—		1,051
Household Durables		439		—		—		439
Information Technology Services		1,136		—		—		1,136
Interactive Media & Services		312		—		—		312
Media		81		—		—		81
Oil, Gas & Consumable Fuels		629		—		—		629
Personal Products		540		—		—		540
Software		2,024		—		—		2,024
Specialty Retail		333		—		—		333
Tech Hardware, Storage & Peripherals		717		—		—		717
Total Common Stocks		13,420		—		—		13,420
Short-Term Investment
Investment Company		235		—		—		235
Total Assets	$	13,655	$	—	$	—	$	13,655

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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

4.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $750 million			Next $750 million			Over $1.5 billion
	0.60	%		0.55	%		0.50	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund 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, 1.15% for Class A shares, 1.90% for Class C shares and 0.75% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $38,000 of advisory fees were waived and approximately $44,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $6,081,000 and $5,736,000,

respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	341	$	1,658	$	1,764	$	2

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	235

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the three-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Paid-in- Capital (000)
$	40	$	111	$	35	$	11

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 in 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 a dividend redesignation, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(1	)	$	1

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	41	$	—

During the year ended December 31, 2018, the Fund utilized capital loss carryforwards for U.S. federal income tax purposes of approximately $249,000.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended December 31, 2018, the Fund intends to defer to January 1, 2019 for U.S. federal income tax purposes the following losses:

Qualified Late Year Ordinary Losses (000)		Post-October Capital Losses (000)
$	—	$	67

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 50.4%.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the one-year period and the period since the end of May 2016, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

18

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

19

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

21

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIUSCPSAN
2669048 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

U.S. Real Estate Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	11
Notes to Financial Statements	17
Investment Advisory Agreement Approval	24
Privacy Notice	26
Director and Officer Information	28

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in U.S. Real Estate Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

U.S. Real Estate Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		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	$	1,124.70	$	1,020.33	$	4.74	$	4.51		0.90	%
U.S. Real Estate Portfolio Class A		1,000.00		1,122.30		1,018.70		6.47		6.16		1.23
U.S. Real Estate Portfolio Class L		1,000.00		1,120.10		1,016.12		9.20		8.75		1.75
U.S. Real Estate Portfolio Class C		1,000.00		1,119.10		1,014.88		10.51		9.99		2.00
U.S. Real Estate Portfolio Class IS		1,000.00		1,125.80		1,020.68		4.37		4.16		0.83
U.S. Real Estate Portfolio Class IR		1,000.00		1,124.90		1,020.68		4.37		4.16		0.83

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

U.S. Real Estate Portfolio

	Shares		Value (000)
Common Stocks (98.8%)
Apartments (16.0%)
American Campus Communities, Inc. REIT		42,670	$	1,970
Apartment Investment & Management Co., Class A REIT		20,846		1,045
AvalonBay Communities, Inc. REIT		61,636		12,523
Camden Property Trust REIT		50,621		5,284
Equity Residential REIT		103,011		7,821
Essex Property Trust, Inc. REIT		12,113		3,536
Mid-America Apartment Communities, Inc. REIT		21,855		2,574
UDR, Inc. REIT		41,401		1,858
				36,611
Data Centers (2.8%)
Digital Realty Trust, Inc. REIT		45,490		5,358
QTS Realty Trust, Inc., Class A REIT		20,938		967
				6,325
Diversified (6.0%)
JBG SMITH Properties REIT		40,664		1,600
Lexington Realty Trust REIT		80,050		753
Mack-Cali Realty Corp. REIT		150,779		3,511
Vornado Realty Trust REIT		123,274		7,902
				13,766
Health Care (6.0%)
HCP, Inc. REIT		40,817		1,305
Healthcare Realty Trust, Inc. REIT		183,644		5,752
Healthcare Trust of America, Inc., Class A REIT		61,194		1,679
Senior Housing Properties Trust REIT		57,140		472
Ventas, Inc. REIT		16,859		1,152
Welltower, Inc. REIT		41,219		3,361
				13,721
Industrial (5.9%)
Duke Realty Corp. REIT		20,125		636
Exeter Industrial Value Fund, LP (a)(b)(c)(d)		7,905,000		538
ProLogis, Inc. REIT		153,149		12,267
				13,441
Lodging/Resorts (10.1%)
Chesapeake Lodging Trust REIT		39,965		1,136
DiamondRock Hospitality Co. REIT		511,561		5,289
Host Hotels & Resorts, Inc. REIT		503,260		9,169
RLJ Lodging Trust REIT		283,923		5,037
Sunstone Hotel Investors, Inc. REIT		181,318		2,486
				23,117
Office (23.5%)
Alexandria Real Estate Equities, Inc. REIT		18,877		2,663
Boston Properties, Inc. REIT		114,653		14,790
Brandywine Realty Trust REIT		29,455		422
Columbia Property Trust, Inc. REIT		139,018		2,883
Corporate Office Properties Trust REIT		30,095		794
Cousins Properties, Inc. REIT		78,460		2,838
Hudson Pacific Properties, Inc. REIT		130,094		4,328
Kilroy Realty Corp. REIT		25,267		1,865

	Shares		Value (000)
Paramount Group, Inc. REIT		349,754	$	4,900
SL Green Realty Corp. REIT		227,292		18,268
				53,751
Regional Malls (14.2%)
Macerich Co. (The) REIT		288,353		9,657
Simon Property Group, Inc. REIT		142,622		22,785
				32,442
Self Storage (5.3%)
CubeSmart REIT		112,561		3,764
Extra Space Storage, Inc. REIT		21,630		2,295
Life Storage, Inc. REIT		10,649		1,013
Public Storage REIT		21,049		5,013
				12,085
Shopping Centers (5.0%)
Brixmor Property Group, Inc. REIT		188,627		3,373
Regency Centers Corp. REIT		99,796		6,660
Weingarten Realty Investors REIT		54,650		1,499
				11,532
Single Family Homes (2.8%)
American Homes 4 Rent, Class A REIT		78,276		1,903
Invitation Homes, Inc. REIT		171,583		4,586
				6,489
Specialty (1.2%)
Gaming and Leisure Properties, Inc. REIT		69,475		2,708
Total Common Stocks (Cost $177,767)				225,988
Short-Term Investment (0.2%)
Investment Company (0.2%)
Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio — Institutional Class (See Note G) (Cost $371)		370,550		371
Total Investments (99.0%) (Cost $178,138) (e)				226,359
Other Assets in Excess of Liabilities (1.0%)				2,190
Net Assets (100.0%)			$	228,549

(a)  Non-income producing security.

(b)  Restricted security valued at fair value and not registered under the Securities Act of 1933. Exeter Industrial Value Fund, LP was acquired between 11/07 — 4/11 and has a current cost basis of approximately $0. At June 30, 2019, this security had an aggregate market value of approximately $538,000, representing 0.2% of net assets.

(c)  At June 30, 2019, the Fund held a fair valued security valued at approximately $538,000, representing 0.2% 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 Company's (as defined herein) Directors.

(d)  Security has been deemed illiquid at June 30, 2019.

(e)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $57,961,000 and the aggregate gross unrealized depreciation is approximately $9,740,000, resulting in net unrealized appreciation of approximately $48,221,000.

REIT  Real Estate Investment Trust.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

U.S. Real Estate Portfolio

Portfolio Composition

Classification	Percentage of Total Investments
Office		23.8	%
Apartments		16.2
Regional Malls		14.3
Lodging/Resorts		10.2
Other*		7.0
Diversified		6.1
Health Care		6.1
Industrial		5.9
Self Storage		5.3
Shopping Centers		5.1
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.
5

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

U.S. Real Estate Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $177,767)	$	225,988
Investment in Security of Affiliated Issuer, at Value (Cost $371)		371
Total Investments in Securities, at Value (Cost $178,138)		226,359
Receivable for Investments Sold		1,853
Dividends Receivable		953
Receivable for Fund Shares Sold		200
Receivable from Affiliate		2
Other Assets		109
Total Assets		229,476
Liabilities:
Payable for Advisory Fees		351
Payable for Investments Purchased		204
Payable for Fund Shares Redeemed		188
Payable for Sub Transfer Agency Fees — Class I		46
Payable for Sub Transfer Agency Fees — Class A		6
Payable for Sub Transfer Agency Fees — Class L		—	@
Payable for Professional Fees		46
Payable for Transfer Agency Fees — Class I		7
Payable for Transfer Agency Fees — Class A		3
Payable for Transfer Agency Fees — Class L		1
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		6
Payable for Transfer Agency Fees — Class IR		—	@
Payable for Administration Fees		15
Payable for Shareholder Services Fees — Class A		7
Payable for Distribution and Shareholder Services Fees — Class L		1
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Custodian Fees		6
Other Liabilities		40
Total Liabilities		927
Net Assets	$	228,549
Net Assets Consist of:
Paid-in-Capital	$	165,800
Total Distributable Earnings		62,749
Net Assets	$	228,549

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

U.S. Real Estate Portfolio

Statement of Assets and Liabilities (cont'd)	June 30, 2019 (000)
CLASS I:
Net Assets	$	179,327
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		14,843,182
Net Asset Value, Offering and Redemption Price Per Share	$	12.08
CLASS A:
Net Assets	$	35,175
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		3,039,171
Net Asset Value, Redemption Price Per Share	$	11.57
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.64
Maximum Offering Price Per Share	$	12.21
CLASS L:
Net Assets	$	2,145
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		185,708
Net Asset Value, Offering and Redemption Price Per Share	$	11.55
CLASS C:
Net Assets	$	252
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		21,985
Net Asset Value, Offering and Redemption Price Per Share	$	11.48
CLASS IS:
Net Assets	$	11,642
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		963,299
Net Asset Value, Offering and Redemption Price Per Share	$	12.09
CLASS IR:
Net Assets	$	8
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		684
Net Asset Value, Offering and Redemption Price Per Share	$	12.08

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

U.S. Real Estate Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers	$	4,814
Dividends from Security of Affiliated Issuer (Note G)		20
Total Investment Income		4,834
Expenses:
Advisory Fees (Note B)		886
Sub Transfer Agency Fees — Class I		95
Sub Transfer Agency Fees — Class A		23
Sub Transfer Agency Fees — Class L		1
Sub Transfer Agency Fees — Class C		—	@
Administration Fees (Note C)		101
Shareholder Services Fees — Class A (Note D)		46
Distribution and Shareholder Services Fees — Class L (Note D)		8
Distribution and Shareholder Services Fees — Class C (Note D)		1
Professional Fees		52
Registration Fees		42
Transfer Agency Fees — Class I (Note E)		9
Transfer Agency Fees — Class A (Note E)		4
Transfer Agency Fees — Class L (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		12
Transfer Agency Fees — Class IR (Note E)		1
Shareholder Reporting Fees		28
Custodian Fees (Note F)		13
Directors' Fees and Expenses		7
Pricing Fees		2
Other Expenses		9
Total Expenses		1,342
Waiver of Advisory Fees (Note B)		(88	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(38	)
Reimbursement of Class Specific Expenses — Class L (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(1	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(12	)
Reimbursement of Class Specific Expenses — Class IR (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(2	)
Net Expenses		1,200
Net Investment Income		3,634
Realized Gain:
Investments Sold		8,865
Change in Unrealized Appreciation (Depreciation):
Investments		18,169
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		27,034
Net Increase in Net Assets Resulting from Operations	$	30,668

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

U.S. Real Estate Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	3,634		$	8,659
Net Realized Gain		8,865			69,053
Net Change in Unrealized Appreciation (Depreciation)		18,169			(115,506	)
Net Increase (Decrease) in Net Assets Resulting from Operations		30,668			(37,794	)
Dividends and Distributions to Shareholders:
Class I		(1,460	)		(53,011	)
Class A		(264	)		(9,885	)
Class L		(13	)		(588	)
Class C		(1	)		(65	)
Class IS		(261	)		(9,183	)
Class IR		(—	@)		(2	)
Total Dividends and Distributions to Shareholders		(1,999	)		(72,734	)
Capital Share Transactions:(1)
Class I:
Subscribed		12,553			35,741
Distributions Reinvested		1,449			52,679
Redeemed		(33,009	)		(167,839	)
Class A:
Subscribed		2,165			3,936
Distributions Reinvested		262			9,810
Redeemed		(5,704	)		(21,113	)
Class L:
Exchanged		—			—	@
Distributions Reinvested		13			582
Redeemed		(160	)		(487	)
Class C:
Subscribed		18			146
Distributions Reinvested		1			63
Redeemed		(138	)		(258	)
Class IS:
Subscribed		787			24,616
Distributions Reinvested		261			8,461
Redeemed		(22,692	)		(178,831	)
Class IR:
Subscribed		—			10	(a)
Distributions Reinvested		—	@		—
Net Decrease in Net Assets Resulting from Capital Share Transactions		(44,194	)		(232,484	)
Total Decrease in Net Assets		(15,525	)		(343,012	)
Net Assets:
Beginning of Period		244,074			587,086
End of Period	$	228,549		$	244,074

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

U.S. Real Estate Portfolio

Statements of Changes in Net Assets (cont'd)	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		1,035			2,593
Shares Issued on Distributions Reinvested		116			4,178
Shares Redeemed		(2,733	)		(12,108	)
Net Decrease in Class I Shares Outstanding		(1,582	)		(5,337	)
Class A:
Shares Subscribed		186			289
Shares Issued on Distributions Reinvested		22			810
Shares Redeemed		(490	)		(1,549	)
Net Decrease in Class A Shares Outstanding		(282	)		(450	)
Class L:
Shares Exchanged		—			—	@@
Shares Issued on Distributions Reinvested		1			48
Shares Redeemed		(14	)		(39	)
Net Increase (Decrease) in Class L Shares Outstanding		(13	)		9
Class C:
Shares Subscribed		2			13
Shares Issued on Distributions Reinvested		—	@@		5
Shares Redeemed		(13	)		(18	)
Net Decrease in Class C Shares Outstanding		(11	)		(—	@@)
Class IS:
Shares Subscribed		65			1,731
Shares Issued on Distributions Reinvested		21			668
Shares Redeemed		(1,852	)		(12,564	)
Net Decrease in Class IS Shares Outstanding		(1,766	)		(10,165	)
Class IR:
Shares Subscribed		—			1
Shares Issued on Distributions Reinvested		—	@@		—
Net Increase in Class IR Shares Outstanding		—	@@		1	(a)

(a)  For the period June 15, 2018 through December 31, 2018.

@  Amount is less than $500.

@@  Amount is less than 500 shares.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

U.S. Real Estate Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	10.82		$	15.24		$	17.21		$	17.86		$	20.48		$	16.55
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.18			0.34			0.37			0.31			0.32			0.36
Net Realized and Unrealized Gain (Loss)		1.17			(1.33	)		0.16			0.91			0.10			4.66
Total from Investment Operations		1.35			(0.99	)		0.53			1.22			0.42			5.02
Distributions from and/or in Excess of:
Net Investment Income		(0.09	)		(0.34	)		(0.26	)		(0.38	)		(0.26	)		(0.35	)
Net Realized Gain		—			(3.09	)		(2.24	)		(1.49	)		(2.78	)		(0.74	)
Total Distributions		(0.09	)		(3.43	)		(2.50	)		(1.87	)		(3.04	)		(1.09	)
Net Asset Value, End of Period	$	12.08		$	10.82		$	15.24		$	17.21		$	17.86		$	20.48
Total Return(3)		12.47	%(7)		(8.44	)%		3.31	%		6.79	%		2.27	%		30.74	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	179,327		$	177,690		$	331,637		$	494,967		$	625,999		$	948,311
Ratio of Expenses Before Expense Limitation		1.01	%(8)		1.02	%		1.02	%		1.02	%		N/A			N/A
Ratio of Expenses After Expense Limitation		0.90	%(4)(8)		0.95	%(4)(5)		1.00	%(4)		1.00	%(4)		0.98	%(4)		0.95	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			0.95	%(4)		1.00	%(4)		N/A			0.98	%(4)		0.94	%(4)
Ratio of Net Investment Income		2.95	%(4)(8)		2.44	%(4)		2.19	%(4)		1.73	%(4)		1.61	%(4)		1.90	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		11	%(7)		39	%		43	%		24	%		24	%		25	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class I shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.90% for Class I shares. Prior to July 1, 2018, the maximum ratio was 1.00% for Class I shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

U.S. Real Estate Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	10.38		$	14.76		$	16.74		$	17.42		$	20.04		$	16.21
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.15			0.29			0.31			0.24			0.28			0.29
Net Realized and Unrealized Gain (Loss)		1.12			(1.28	)		0.15			0.89			0.08			4.56
Total from Investment Operations		1.27			(0.99	)		0.46			1.13			0.42			4.85
Distributions from and/or in Excess of:
Net Investment Income		(0.08	)		(0.30	)		(0.20	)		(0.32	)		(0.20	)		(0.28	)
Net Realized Gain		—			(3.09	)		(2.24	)		(1.49	)		(2.78	)		(0.74	)
Total Distributions		(0.08	)		(3.39	)		(2.44	)		(1.81	)		(2.98	)		(1.02	)
Net Asset Value, End of Period	$	11.57		$	10.38		$	14.76		$	16.74		$	17.42		$	20.04
Total Return(3)		12.23	%(7)		(8.71	)%		2.98	%		6.47	%		2.01	%		30.28	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	35,175		$	34,459		$	55,640		$	76,082		$	87,462		$	107,441
Ratio of Expenses Before Expense Limitation		1.30	%(8)		1.30	%		N/A			1.30	%		N/A			N/A
Ratio of Expenses After Expense Limitation		1.23	%(4)(8)		1.26	%(4)(5)		1.34	%(4)		1.29	%(4)		1.28	%(4)		1.31	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			1.26	%(4)		1.34	%(4)		N/A			1.28	%(4)		1.30	%(4)
Ratio of Net Investment Income		2.62	%(4)(8)		2.14	%(4)		1.87	%(4)		1.37	%(4)		1.43	%(4)		1.54	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		11	%(7)		39	%		43	%		24	%		24	%		25	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class A shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.25% for Class A shares. Prior to July 1, 2018, the maximum ratio was 1.35% for Class A shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

U.S. Real Estate Portfolio

	Class L
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	10.37		$	14.74		$	16.73		$	17.41		$	20.03		$	16.20
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.12			0.23			0.22			0.15			0.21			0.20
Net Realized and Unrealized Gain (Loss)		1.13			(1.28	)		0.15			0.89			0.04			4.56
Total from Investment Operations		1.25			(1.05	)		0.37			1.04			0.25			4.76
Distributions from and/or in Excess of:
Net Investment Income		(0.07	)		(0.23	)		(0.12	)		(0.23	)		(0.09	)		(0.19	)
Net Realized Gain		—			(3.09	)		(2.24	)		(1.49	)		(2.78	)		(0.74	)
Total Distributions		(0.07	)		(3.32	)		(2.36	)		(1.72	)		(2.87	)		(0.93	)
Net Asset Value, End of Period	$	11.55		$	10.37		$	14.74		$	16.73		$	17.41		$	20.03
Total Return(3)		12.01	%(7)		(9.16	)%		2.37	%		5.91	%		1.44	%		29.68	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,145		$	2,057		$	2,787		$	3,471		$	3,993		$	4,919
Ratio of Expenses Before Expense Limitation		1.84	%(8)		1.84	%		1.89	%		1.84	%		N/A			N/A
Ratio of Expenses After Expense Limitation		1.75	%(4)(8)		1.79	%(4)(5)		1.85	%(4)		1.84	%(4)		1.82	%(4)		1.79	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			1.79	%(4)		1.85	%(4)		N/A			1.81	%(4)		1.78	%(4)
Ratio of Net Investment Income		2.10	%(4)(8)		1.71	%(4)		1.37	%(4)		0.84	%(4)		1.08	%(4)		1.06	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		11	%(7)		39	%		43	%		24	%		24	%		25	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class L shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment Income would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 1.75% for Class L shares. Prior to July 1, 2018, the maximum ratio was 1.85% for Class L shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

U.S. Real Estate Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,									Period from April 30, 2015(2) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			December 31, 2015
Net Asset Value, Beginning of Period	$	10.31		$	14.68		$	16.67		$	17.36		$	19.73
Income (Loss) from Investment Operations:
Net Investment Income(3)		0.11			0.19			0.20			0.13			0.18
Net Realized and Unrealized Gain (Loss)		1.12			(1.29	)		0.13			0.87			0.31
Total from Investment Operations		1.23			(1.10	)		0.33			1.00			0.49
Distributions from and/or in Excess of:
Net Investment Income		(0.06	)		(0.18	)		(0.08	)		(0.20	)		(0.08	)
Net Realized Gain		—			(3.09	)		(2.24	)		(1.49	)		(2.78	)
Total Distributions		(0.06	)		(3.27	)		(2.32	)		(1.69	)		(2.86	)
Net Asset Value, End of Period	$	11.48		$	10.31		$	14.68		$	16.67		$	17.36
Total Return(4)		11.91	%(8)		(9.47	)%		2.14	%		5.72	%		2.70	%(8)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	252		$	338		$	486		$	427		$	91
Ratio of Expenses Before Expense Limitation		2.69	%(9)		2.75	%		2.46	%		3.13	%		5.89	%(9)
Ratio of Expenses After Expense Limitation		2.00	%(5)(9)		2.05	%(5)(6)		2.10	%(5)		2.10	%(5)		2.10	%(5)(9)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			2.05	%(5)		2.10	%(5)		N/A			2.10	%(5)(9)
Ratio of Net Investment Income		1.85	%(5)(9)		1.39	%(5)		1.21	%(5)		0.73	%(5)		1.44	%(5)(9)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(7)(9)		0.00	%(7)		0.00	%(7)		0.00	%(7)		0.00	%(7)(9)
Portfolio Turnover Rate		11	%(8)		39	%		43	%		24	%		24	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class C shares. The Ratio of Expenses After Expense Limitation and the Ratio of Net Investment Income would be unchanged as the reimbursement of custodian fees was offset against expense waivers/reimbursements with no impact to net expenses or net investment income.

(2)  Commencement of Offering.

(3)  Per share amount is based on average shares outstanding.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 2.00% for Class C shares. Prior to July 1, 2018, the maximum ratio was 2.10% for Class C shares.

(7)  Amount is less than 0.005%.

(8)  Not annualized.

(9)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

U.S. Real Estate Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,
Selected Per Share Data and Ratios	(unaudited)			2018			2017			2016(1)			2015			2014
Net Asset Value, Beginning of Period	$	10.82		$	15.24		$	17.22		$	17.86		$	20.48		$	16.55
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.16			0.28			0.39			0.33			0.36			0.38
Net Realized and Unrealized Gain (Loss)		1.20			(1.26	)		0.14			0.92			0.08			4.65
Total from Investment Operations		1.36			(0.98	)		0.53			1.25			0.44			5.03
Distributions from and/or in Excess of:
Net Investment Income		(0.09	)		(0.35	)		(0.27	)		(0.40	)		(0.28	)		(0.36	)
Net Realized Gain		—			(3.09	)		(2.24	)		(1.49	)		(2.78	)		(0.74	)
Total Distributions		(0.09	)		(3.44	)		(2.51	)		(1.89	)		(3.06	)		(1.10	)
Net Asset Value, End of Period	$	12.09		$	10.82		$	15.24		$	17.22		$	17.86		$	20.48
Total Return(3)		12.58	%(7)		(8.36	)%		3.32	%		6.96	%		2.36	%		30.82	%
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	11,642		$	29,523		$	196,536		$	195,490		$	141,670		$	12
Ratio of Expenses Before Expense Limitation		0.99	%(8)		0.97	%		N/A			0.90	%		0.90	%		20.21	%
Ratio of Expenses After Expense Limitation		0.83	%(4)(8)		0.91	%(4)(5)		0.93	%(4)		0.89	%(4)		0.90	%(4)		0.89	%(4)
Ratio of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			0.91	%(4)		0.93	%(4)		N/A			0.90	%(4)		0.88	%(4)
Ratio of Net Investment Income		2.76	%(4)(8)		1.98	%(4)		2.33	%(4)		1.79	%(4)		1.81	%(4)		1.96	%(4)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)		0.00	%(6)
Portfolio Turnover Rate		11	%(7)		39	%		43	%		24	%		24	%		25	%

(1)  Reflects prior period custodian out-of-pocket expenses that were reimbursed in September 2016. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of Class IS shares. The Ratio of Expenses After Expense Limitation would have been less than 0.005% higher and the Ratio of Net Investment would have been less than 0.005% lower had the custodian not reimbursed the Fund.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.83% for Class IS shares. Prior to July 1, 2018, the maximum ratio was 0.93% for Class IS shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

U.S. Real Estate Portfolio

	Class IR
Selected Per Share Data and Ratios	Six Months Ended June 30, 2019 (unaudited)			Period from June 15, 2018(1) to December 31, 2018
Net Asset Value, Beginning of Period	$	10.82		$	14.74
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.18			0.43
Net Realized and Unrealized Gain (Loss)		1.17			(0.98	)
Total from Investment Operations		1.35			(0.55	)
Distributions from and/or in Excess of:
Net Investment Income		(0.09	)		(0.28	)
Net Realized Gain		—			(3.09	)
Total Distributions		(0.09	)		(3.37	)
Net Asset Value, End of Period	$	12.08		$	10.82
Total Return(3)		12.49	%(7)		(5.73	)%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period, (Thousands)	$	8		$	7
Ratio of Expenses Before Expense Limitation		20.88	%(8)		19.12	%(8)
Ratio of Expenses After Expense Limitation		0.83	%(4)(8)		0.84	%(4)(5)(8)
Ratios of Expenses After Expense Limitation Excluding Non Operating Expenses		N/A			0.84	%(4)(8)
Ratio of Net Investment Income		3.04	%(4)(8)		4.23	%(4)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(6)(8)		0.00	%(6)(8)
Portfolio Turnover Rate		11	%(7)		39	%

(1)  Commencement of Offering.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Effective July 1, 2018, the Adviser has agreed to limit the ratio of expenses to average net assets to the maximum ratio of 0.83% for Class IR shares. Prior to July 1, 2018, the maximum ratio was 0.93% for Class IR shares.

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the U.S. Real Estate Portfolio. The Fund 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 Fund has a capital subscription commitment to an investee company for this same purpose, the details of which are disclosed in the Unfunded Commitments note.

The Fund offers six classes of shares — Class I, Class A, Class L, Class C, Class IS and Class IR. On April 30, 2015, the Fund suspended offering of Class L shares. Existing Class L shareholders may invest through reinvestment of dividends and distributions.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (4) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

"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; and (6) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The Fund 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 Fund.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	36,611	$	—	$	—	$	36,611
Data Centers		6,325		—		—		6,325
Diversified		13,766		—		—		13,766
Health Care		13,721		—		—		13,721
Industrial		12,903		—		538		13,441
Lodging/Resorts		23,117		—		—		23,117
Office		53,751		—		—		53,751
Regional Malls		32,442		—		—		32,442
Self Storage		12,085		—		—		12,085
Shopping Centers		11,532		—		—		11,532
Single Family Homes		6,489		—		—		6,489
Specialty		2,708		—		—		2,708
Total Common Stocks		225,450		—		538		225,988
Short-Term Investment
Investment Company		371		—		—		371
Total Assets	$	225,821	$	—	$	538	$	226,359

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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

	Common Stock (000)
Beginning Balance	$	552
Purchases		—
Sales		—
Amortization of discount		—
Transfers in		—
Transfers out		—
Corporate actions		—
Change in unrealized appreciation (depreciation)		(14	)
Realized gains (losses)		—
Ending Balance	$	538
Net change in unrealized depreciation from investments still held as of June 30, 2019	$	(14	)

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, 2019:

	Fair Value at June 30, 2019 (000)		Valuation Technique	Unobservable Input
Common   Stock	$	538	Reported Capital balance, adjustments for NAV practical expedient; including adjustments for subsequent Capital Calls, Return of Capital and Significant Market Changes between last Capital Statement and Valuation Date	Adjusted Capital Balance

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Unfunded Commitments: Subject to the terms of a Subscription Agreement between the Fund and Exeter Industrial Value Fund LP, the Fund has made a subscription commitment of $8,500,000 for which it will receive 8,500,000 shares of common stock. As of June 30, 2019, Exeter Industrial Value Fund LP has drawn down approximately $7,905,000, which represents 93.0% of the commitment.

5.  Restricted Securities: The Fund 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 Fund 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 Fund, 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 Fund can 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 the acquirer of the securities. The Fund would, in either case, bear market risks during that period. Restricted securities are identified in the Portfolio of Investments.

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

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

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

allocated to each class of shares based upon their relative net assets.

The Fund 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.

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

First $500 million			Next $500 million			Over $1 billion
	0.70	%		0.65	%		0.60	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.63% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 0.90% Class I shares, 1.25% for Class A shares, 1.75% for Class L shares, 2.00% for Class C shares, 0.83% for Class IS shares and 0.83% for Class IR shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $88,000 of advisory fees were waived and approximately $52,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class L shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.50% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class L shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A, Class L and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases

21

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $28,205,000 and $72,520,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by approximately $2,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	—	$	22,990	$	22,619	$	20

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	371

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded

with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Long-Term Capital Gain (000)
$	9,631	$	63,103	$	10,843	$	78,064

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 in the timing of the recognition of gains (losses)

22

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to equalization debits, resulted in the following reclassifications among the components of net assets at December 31, 2018:

Total Distributable Earnings (000)			Paid-in- Capital (000)
$	(18,017	)	$	18,017

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	2,333	$	5,577

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 56.3%.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below 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 Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund'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 Fund's contractual management fee was lower than its peer group average, the actual management fee was higher than its peer group average and the total expense ratio was higher than but close to its peer group average. After discussion, the Board concluded that the Fund's (i) performance was acceptable, (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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

24

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

25

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

26

Privacy Notice (unaudited) (cont'd)

Who we are

Who is providing this notice? Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")

What we do

How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

Definitions

Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market

Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

27

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

28

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIUSREASAN
2669020 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Concentrated Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	5
Statement of Operations	6
Statements of Changes in Net Assets	7
Financial Highlights	8
Notes to Financial Statements	12
Investment Advisory Agreement Approval	17
Privacy Notice	19
Director and Officer Information	21

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Concentrated Portfolio (the "Fund") performed during the latest six-month period.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Concentrated Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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, 2019 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 1/1/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Concentrated Portfolio Class I	$	1,000.00	$	1,188.00	$	1,019.84	$	5.43	$	5.01		1.00	%
Global Concentrated Portfolio Class A		1,000.00		1,185.90		1,018.20		7.21		6.66		1.33
Global Concentrated Portfolio Class C		1,000.00		1,181.50		1,014.43		11.30		10.44		2.09
Global Concentrated Portfolio Class IS		1,000.00		1,188.00		1,020.08		5.15		4.76		0.95

*  Expenses are calculated using each Fund 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.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Concentrated Portfolio

	Shares		Value (000)
Common Stocks (98.9%)
China (14.6%)
Alibaba Group Holding Ltd. ADR (a)		8,891	$	1,507
Tencent Holdings Ltd. ADR		25,369		1,148
				2,655
France (5.8%)
LVMH Moet Hennessy Louis Vuitton SE ADR		12,373		1,053
Ireland (1.7%)
Ryanair Holdings PLC ADR (a)		4,734		304
Japan (3.1%)
SoftBank Group Corp. ADR		11,839		567
Spain (4.9%)
Banco Santander SA ADR		194,912		893
Taiwan (4.8%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		22,339		875
United Kingdom (18.2%)
Diageo PLC ADR		7,364		1,269
Royal Dutch Shell PLC ADR		31,512		2,050
				3,319
United States (45.8%)
Diamondback Energy, Inc.		5,266		574
Estee Lauder Cos., Inc. (The), Class A		3,983		729
JPMorgan Chase & Co.		8,146		911
Lennar Corp., Class A		15,330		743
Microsoft Corp.		10,548		1,413
NextEra Energy, Inc.		4,751		973
STORE Capital Corp. REIT		25,819		857
SVB Financial Group (a)		3,395		762
VMware, Inc., Class A		3,601		602
Welltower, Inc. REIT		9,662		788
				8,352
Total Common Stocks (Cost $16,454)				18,018
Short-Term Investment (0.6%)
Investment Company (0.6%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $107)		106,798		107
Total Investments (99.5%) (Cost $16,561) (b)				18,125
Other Assets in Excess of Liabilities (0.5%)				99
Net Assets (100.0%)			$	18,224

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $1,675,000 and the aggregate gross unrealized depreciation is approximately $111,000, resulting in net unrealized appreciation of approximately $1,564,000.

ADR  American Depositary Receipt.

REIT  Real Estate Investment Trust.

Portfolio Composition

Classification	Percentage of Total Investments
Other*		18.3	%
Oil, Gas & Consumable Fuels		14.5
Banks		14.2
Software		11.1
Equity Real Estate Investment Trusts (REITs)		9.1
Internet & Direct Marketing Retail		8.3
Beverages		7.0
Interactive Media & Services		6.3
Textiles, Apparel & Luxury Goods		5.8
Electric Utilities		5.4
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.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Concentrated Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $16,454)	$	18,018
Investment in Security of Affiliated Issuer, at Value (Cost $107)		107
Total Investments in Securities, at Value (Cost $16,561)		18,125
Receivable for Investments Sold		3,666
Receivable for Fund Shares Sold		49
Dividends Receivable		31
Due from Adviser		2
Tax Reclaim Receivable		1
Receivable from Affiliate		—	@
Other Assets		70
Total Assets		21,944
Liabilities:
Payable for Investments Purchased		3,663
Payable for Professional Fees		49
Payable for Sub Transfer Agency Fees — Class I		3
Payable for Sub Transfer Agency Fees — Class A		—	@
Payable for Sub Transfer Agency Fees — Class C		—	@
Payable for Shareholder Services Fees — Class A		1
Payable for Distribution and Shareholder Services Fees — Class C		2
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Transfer Agency Fees — Class C		—	@
Payable for Transfer Agency Fees — Class IS		—	@
Payable for Custodian Fees		1
Payable for Administration Fees		1
Other Liabilities		—	@
Total Liabilities		3,720
Net Assets	$	18,224
Net Assets Consist of:
Paid-in-Capital	$	16,798
Total Distributable Earnings		1,426
Net Assets	$	18,224
CLASS I:
Net Assets	$	13,249
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,059,507
Net Asset Value, Offering and Redemption Price Per Share	$	12.51
CLASS A:
Net Assets	$	2,722
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		218,915
Net Asset Value, Redemption Price Per Share	$	12.44
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.69
Maximum Offering Price Per Share	$	13.13
CLASS C:
Net Assets	$	2,240
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		183,006
Net Asset Value, Offering and Redemption Price Per Share	$	12.24
CLASS IS:
Net Assets	$	13
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	12.51

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Concentrated Portfolio

Statement of Operations	Six Months Ended June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $9 of Foreign Taxes Withheld)	$	162
Dividends from Security of Affiliated Issuer (Note G)		2
Total Investment Income		164
Expenses:
Advisory Fees (Note B)		66
Professional Fees		47
Registration Fees		18
Shareholder Services Fees — Class A (Note D)		3
Distribution and Shareholder Services Fees — Class C (Note D)		12
Shareholder Reporting Fees		7
Administration Fees (Note C)		7
Sub Transfer Agency Fees — Class I		4
Sub Transfer Agency Fees — Class A		1
Sub Transfer Agency Fees — Class C		1
Transfer Agency Fees — Class I (Note E)		1
Transfer Agency Fees — Class A (Note E)		1
Transfer Agency Fees — Class C (Note E)		1
Transfer Agency Fees — Class IS (Note E)		1
Custodian Fees (Note F)		3
Directors' Fees and Expenses		3
Pricing Fees		1
Other Expenses		7
Total Expenses		184
Waiver of Advisory Fees (Note B)		(66	)
Expenses Reimbursed by Adviser (Note B)		(9	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(2	)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(1	)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		106
Net Investment Income		58
Realized Gain:
Investments Sold		472
Change in Unrealized Appreciation (Depreciation):
Investments		2,422
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		2,894
Net Increase in Net Assets Resulting from Operations	$	2,952

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Concentrated Portfolio

Statements of Changes in Net Assets	Six Months Ended June 30, 2019 (unaudited) (000)			Year Ended December 31, 2018 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	58		$	209
Net Realized Gain (Loss)		472			(585	)
Net Change in Unrealized Appreciation (Depreciation)		2,422			(3,093	)
Net Increase (Decrease) in Net Assets Resulting from Operations		2,952			(3,469	)
Dividends and Distributions to Shareholders:
Class I		—			(84	)
Class A		—			(8	)
Class C		—			—	@
Total Dividends and Distributions to Shareholders		—			(92	)
Capital Share Transactions:(1)
Class I:
Subscribed		771			9,706
Distributions Reinvested		—			47
Redeemed		(1,209	)		(7,354	)
Class A:
Subscribed		754			1,453
Distributions Reinvested		—			7
Redeemed		(675	)		(470	)
Class C:
Subscribed		180			1,750
Redeemed		(590	)		(757	)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions		(769	)		4,382
Total Increase in Net Assets		2,183			821
Net Assets:
Beginning of Period		16,041			15,220
End of Period	$	18,224		$	16,041
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		66			762
Shares Issued on Distributions Reinvested		—			4
Shares Redeemed		(104	)		(620	)
Net Increase (Decrease) in Class I Shares Outstanding		(38	)		146
Class A:
Shares Subscribed		65			115
Shares Issued on Distributions Reinvested		—			1
Shares Redeemed		(57	)		(40	)
Net Increase in Class A Shares Outstanding		8			76
Class C:
Shares Subscribed		15			141
Shares Redeemed		(50	)		(63	)
Net Increase (Decrease) in Class C Shares Outstanding		(35	)		78

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Concentrated Portfolio

	Class I
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.53		$	12.42		$	10.16		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.14			0.02			0.03
Net Realized and Unrealized Gain (Loss)		1.93			(1.95	)		2.28			0.19
Total from Investment Operations		1.98			(1.81	)		2.30			0.22
Distributions from and/or in Excess of:
Net Investment Income		—			(0.08	)		(0.03	)		(0.06	)
Paid-in-Capital		—			—			(0.01	)		—
Total Distributions		—			(0.08	)		(0.04	)		(0.06	)
Net Asset Value, End of Period	$	12.51		$	10.53		$	12.42		$	10.16
Total Return(3)		18.80	%(6)		(14.61	)%		22.64	%		2.24	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13,249		$	11,554		$	11,814		$	6,922
Ratio of Expenses Before Expense Limitation		1.88	%(7)		1.90	%		3.13	%		3.57	%(7)
Ratio of Expenses After Expense Limitation		1.00	%(4)(7)		1.00	%(4)		0.98	%(4)		0.97	%(4)(7)
Ratio of Net Investment Income		0.88	%(4)(7)		1.13	%(4)		0.15	%(4)		0.48	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		75	%(6)		94	%		68	%		44	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Concentrated Portfolio

	Class A
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.49		$	12.37		$	10.15		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		0.03			0.11			(0.03	)		0.01
Net Realized and Unrealized Gain (Loss)		1.92			(1.95	)		2.28			0.19
Total from Investment Operations		1.95			(1.84	)		2.25			0.20
Distributions from and/or in Excess of:
Net Investment Income		—			(0.04	)		(0.03	)		(0.05	)
Net Asset Value, End of Period	$	12.44		$	10.49		$	12.37		$	10.15
Total Return(3)		18.59	%(6)		(14.91	)%		22.17	%		2.02	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,722		$	2,213		$	1,666		$	782
Ratio of Expenses Before Expense Limitation		2.18	%(7)		2.24	%		3.61	%		4.23	%(7)
Ratio of Expenses After Expense Limitation		1.33	%(4)(7)		1.35	%(4)		1.35	%(4)		1.35	%(4)(7)
Ratio of Net Investment Income (Loss)		0.55	%(4)(7)		0.91	%(4)		(0.25	)%(4)		0.16	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		75	%(6)		94	%		68	%		44	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Concentrated Portfolio

	Class C
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.36		$	12.27		$	10.15		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income (Loss)(2)		(0.01	)		0.02			(0.11	)		(0.04	)
Net Realized and Unrealized Gain (Loss)		1.89			(1.93	)		2.26			0.21
Total from Investment Operations		1.88			(1.91	)		2.15			0.17
Distributions from and/or in Excess of:
Net Investment Income		—			—			(0.03	)		(0.02	)
Net Asset Value, End of Period	$	12.24		$	10.36		$	12.27		$	10.15
Total Return(3)		18.15	%(6)		(15.57	)%		21.18	%		1.69	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,240		$	2,263		$	1,728		$	877
Ratio of Expenses Before Expense Limitation		2.94	%(7)		2.98	%		4.36	%		4.81	%(7)
Ratio of Expenses After Expense Limitation		2.09	%(4)(7)		2.09	%(4)		2.10	%(4)		2.10	%(4)(7)
Ratio of Net Investment Income (Loss)		(0.24	)%(4)(7)		0.18	%(4)		(0.95	)%(4)		(0.69	)%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		75	%(6)		94	%		68	%		44	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income (Loss) reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Concentrated Portfolio

	Class IS
	Six Months Ended June 30, 2019			Year Ended December 31,						Period from May 27, 2016(1) to
Selected Per Share Data and Ratios	(unaudited)			2018			2017			December 31, 2016
Net Asset Value, Beginning of Period	$	10.53		$	12.42		$	10.16		$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.05			0.16			0.02			0.03
Net Realized and Unrealized Gain (Loss)		1.93			(1.97	)		2.28			0.20
Total from Investment Operations		1.98			(1.81	)		2.30			0.23
Distributions from and/or in Excess of:
Net Investment Income		—			(0.08	)		(0.03	)		(0.07	)
Paid-in-Capital		—			—			(0.01	)		—
Total Distributions		—			(0.08	)		(0.04	)		(0.07	)
Net Asset Value, End of Period	$	12.51		$	10.53		$	12.42		$	10.16
Total Return(3)		18.80	%(6)		(14.55	)%		22.67	%		2.25	%(6)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	13		$	11		$	12		$	10
Ratio of Expenses Before Expense Limitation		16.00	%(7)		17.97	%		18.61	%		19.43	%(7)
Ratio of Expenses After Expense Limitation		0.95	%(4)(7)		0.95	%(4)		0.95	%(4)		0.95	%(4)(7)
Ratio of Net Investment Income		0.92	%(4)(7)		1.27	%(4)		0.22	%(4)		0.56	%(4)(7)
Ratio of Rebate from Morgan Stanley Affiliates		0.00	%(5)(7)		0.00	%(5)		0.00	%(5)		0.00	%(5)(7)
Portfolio Turnover Rate		75	%(6)		94	%		68	%		44	%(6)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Amount is less than 0.005%.

(6)  Not annualized.

(7)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Concentrated Portfolio. The Fund seeks long-term capital appreciation.

The Fund offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices

if such bid and asked prices are available on the relevant exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (3) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (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

12

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; and (5) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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 Fund's investments as of June 30, 2019:

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
Airlines	$	304	$	—	$	—	$	304
Banks		2,566		—		—		2,566
Beverages		1,269		—		—		1,269
Electric Utilities		973		—		—		973
Equity Real Estate Investment Trusts (REITs)		1,645		—		—		1,645
Household Durables		743		—		—		743
Interactive Media & Services		1,148		—		—		1,148
Internet & Direct Marketing Retail		1,507		—		—		1,507

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (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)
Oil, Gas & Consumable Fuels	$	2,624	$	—	$	—	$	2,624
Personal Products		729		—		—		729
Semiconductors & Semiconductor Equipment		875		—		—		875
Software		2,015		—		—		2,015
Textiles, Apparel & Luxury Goods		1,053		—		—		1,053
Wireless Telecommunication Services		567		—		—		567
Total Common Stocks		18,018		—		—		18,018
Short-Term Investment
Investment Company		107		—		—		107
Total Assets	$	18,125	$	—	$	—	$	18,125

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

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

4.  Dividends and Distributions to Shareholders: Dividends 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.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon

relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $750 million			Next $750 million			Over $1.5 billion
	0.75	%		0.70	%		0.65	%

For the six months ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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, 2019, approximately $66,000 of advisory fees were waived and approximately $12,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

F. Custodian Fees: State Street (the "Custodian") also serves as Custodian for the Company in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $12,977,000 and $13,664,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2019, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the six months ended June 30, 2019 is as follows:

Affiliated Investment Company	Value December 31, 2018 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	28	$	2,534	$	2,455	$	2

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	107

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the six months ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the three-year period ended December 31, 2018 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2018 and 2017 was as follows:

2018 Distributions Paid From:				2017 Distributions Paid From:
Ordinary Income (000)		Long-Term Capital Gain (000)		Ordinary Income (000)		Paid-in- Capital (000)
$	92	$	—	$	23	$	9

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.

The Fund had no permanent differences causing reclassifications among the components of net assets for the year ended December 31, 2018.

At December 31, 2018, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)		Undistributed Long-Term Capital Gain (000)
$	114	$	—

At December 31, 2018, the Fund had available for federal income tax purposes unused short-term capital losses of approximately $595,000 that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the shareholders.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $150,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. Effective April 22, 2019, the committed line amount increased to $300,000,000. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the six months ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 64.9%.

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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 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 Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as prepared by Broadridge Financial Solutions, Inc. ("Broadridge").

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as prepared by Broadridge, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. 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, 2018, 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 Fund's performance was below its peer group average for the one-year period and for the period since the end of May 2016, the month of the Fund's inception. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as prepared by Broadridge. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the Fund's management fee and total expense ratio were lower than its peer group averages. After discussion, the Board concluded that the Fund's (i) performance was acceptable and (ii) 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 Fund and how that relates to the Fund's total expense ratio and particularly the Fund'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 Fund 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/or potential economies of scale of the Fund 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 Fund 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.

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. The Board reviewed with the Adviser 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 Fund 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 Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in 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, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

18

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

19

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other important information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

20

Morgan Stanley Institutional Fund Trust

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

21

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGCNPSAN
2663853 EXP. 08.31.20

INVESTMENT MANAGEMENT

Morgan Stanley Institutional Fund, Inc.

Global Permanence Portfolio

Semi-Annual Report

June 30, 2019

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission ("SEC"), paper copies of the Fund's Annual and Semi-Annual Reports to Shareholders ("Shareholder Reports") will no longer be sent by mail, unless you specifically request paper copies of the Shareholder Reports from the Fund or from your financial intermediary, such as a broker-dealer or a bank. Instead, the Shareholder Reports will be made available on the Fund's website, https://www.morganstanley.com/im/shareholderreports and you will be notified by mail each time a Shareholder Report is posted and provided with a website link to access the Shareholder Report. If you already elected to receive Shareholder Reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive Shareholder Reports and other communications from the Fund electronically anytime by contacting your financial intermediary or, if you are a direct investor, please follow the instructions on the envelope.

Beginning on January 1, 2019, you may elect to receive all future Shareholder Reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your Shareholder Reports. If you invest directly with the Fund, please follow the instructions on the envelope to let the Fund know you wish to continue receiving paper copies of your Shareholder Reports. Your election to receive Shareholder Reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all funds held with the fund complex if you invest directly with a fund.

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Table of Contents

Shareholders' Letter	2
Expense Example	3
Portfolio of Investments	4
Statement of Assets and Liabilities	6
Statement of Operations	7
Statement of Changes in Net Assets	8
Financial Highlights	9
Notes to Financial Statements	13
Investment Advisory Agreement Approval	20
Privacy Notice	22
Director and Officer Information	24

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable Fund of Morgan Stanley Institutional Fund, Inc. To receive a prospectus and/or statement of additional information ("SAI"), which contains more complete information such as investment objectives, charges, expenses, policies for voting proxies, risk considerations and describes in detail each of the Fund's investment policies to the prospective investor, please call toll free 1 (800) 548-7786. Please read the prospectuses carefully before you invest or send money.

Additionally, you can access information about the Fund, including performance, characteristics and investment team commentary, through Morgan Stanley Investment Management's website: www.morganstanley.com/im/shareholderreports.

There is no assurance that a fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. Please see the prospectus for more complete information on investment risks.

1

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Shareholders' Letter (unaudited)

Dear Shareholders,

We are pleased to provide this Semi-Annual Report, in which you will learn how your investment in Global Permanence Portfolio (the "Fund") performed during the period beginning April 30, 2019 (when the Fund commenced operations) and ended June 30, 2019.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management, and look forward to working with you in the months and years ahead.

Sincerely,

John H. Gernon
President and Principal Executive Officer

July 2019

2

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Expense Example (unaudited)

Global Permanence Portfolio

As a shareholder of the Fund, you incur two types of costs: (1) transactional costs; and (2) ongoing costs, which may include advisory fees, administration fees, distribution and shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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 period and held for the entire period 4/30/19-6/30/19.

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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund'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 Fund 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 transactional costs, such as sales charges (loads). Therefore, the information for each class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value 4/30/19		Actual Ending Account Value 6/30/19		Hypothetical Ending Account Value		Actual Expenses Paid During Period*		Hypothetical Expenses Paid During Period*		Net Expense Ratio During Period**
Global Permanence Portfolio Class I^	$	1,000.00	$	1,035.00	$	1,006.70	$	1.68	$	1.66		0.99	%
Global Permanence Portfolio Class A^		1,000.00		1,034.00		1,006.12		2.28		2.25		1.34
Global Permanence Portfolio Class C^		1,000.00		1,033.00		1,004.86		3.55		3.50		2.09
Global Permanence Portfolio Class IS^		1,000.00		1,035.00		1,006.79		1.60		1.58		0.94

*  Expenses are calculated using each Fund Class' annualized net expense ratio (as disclosed), multiplied by the average account value over the period and multiplied by 61/365 (to reflect the actual days in the period).

**  Annualized.

^  The Fund commenced operations on April 30, 2019.

3

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments

Global Permanence Portfolio

	Shares		Value (000)
Common Stocks (97.0%)
Canada (5.7%)
Brookfield Asset Management, Inc., Class A		1,017	$	49
Canadian National Railway Co.		749		69
				118
Denmark (0.8%)
Chr Hansen Holding A/S		182		17
France (20.6%)
Christian Dior SE		191		100
EssilorLuxottica SA		558		73
Getlink SE		1,851		30
Hermes International		109		78
L'Oreal SA		262		75
Pernod Ricard SA		172		32
Remy Cointreau SA		143		21
Safran SA		145		21
				430
Mexico (1.4%)
Grupo Aeroportuario del Sureste SAB de CV, Class B		1,815		29
Spain (1.5%)
Aena SME SA		161		32
Switzerland (1.0%)
Schindler Holding AG		88		20
United Kingdom (6.1%)
Compass Group PLC		1,333		32
Diageo PLC		469		20
Rentokil Initial PLC		14,914		75
				127
United States (59.9%)
Amazon.com, Inc. (a)		51		96
Ball Corp.		483		34
Broadridge Financial Solutions, Inc.		608		78
Brown-Forman Corp., Class B		371		20
Cintas Corp.		93		22
Copart, Inc. (a)		979		73
Ecolab, Inc.		536		106
Estee Lauder Cos., Inc. (The), Class A		177		32
Gartner, Inc. (a)		454		73
HEICO Corp., Class A		654		68
Intuitive Surgical, Inc. (a)		141		74
Martin Marietta Materials, Inc.		94		22
McCormick & Co., Inc.		136		21
MSCI, Inc.		220		52
Rollins, Inc.		2,030		73
S&P Global, Inc.		231		53
Service Corp. International		464		22
ServiceMaster Global Holdings, Inc. (a)		1,184		62
Sherwin-Williams Co. (The)		65		30
Vail Resorts, Inc.		134		30
Verisk Analytics, Inc.		361		53

	Shares		Value (000)
Walt Disney Co. (The)		733	$	102
Waste Connections, Inc.		565		54
				1,250
Total Common Stocks (Cost $1,951)				2,023
Short-Term Investment (1.8%)
Investment Company (1.8%)
Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio — Institutional Class (See Note G) (Cost $38)		38,257		38
Total Investments Excluding Purchased Options (98.8%) (Cost $1,989)				2,061
Total Purchased Options Outstanding (0.1%) (Cost $2)				1
Total Investments (98.9%) (Cost $1,991) (b)(c)				2,062
Other Assets in Excess of Liabilities (1.1%)				23
Net Assets (100.0%)			$	2,085

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

(a)  Non-income producing security.

(b)  The approximate fair value and percentage of net assets, $626,000 and 30.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to the Financial Statements.

(c)  At June 30, 2019, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $83,000 and the aggregate gross unrealized depreciation is approximately $12,000, resulting in net unrealized appreciation of approximately $71,000.

The accompanying notes are an integral part of the financial statements.
4

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Portfolio of Investments (cont'd)

Global Permanence Portfolio

Call Option Purchased:

The Fund had the following call option purchased open at June 30, 2019:

Counterparty	Description		Strike Price		Expiration Date	Number of Contracts		Notional Amount (000)		Value (000)		Premiums Paid (000)		Unrealized Depreciation (000)
Royal Bank of Scotland		USD/CNH	CNH	7.85	Jun-20		396,201		396	$	1	$	2	$	(1	)

CNH  —  Chinese Yuan Renminbi Offshore

USD  —  United States Dollar

Portfolio Composition

Classification	Percentage of Total Investments
Other*		41.0	%
Commercial Services & Supplies		14.4
Textiles, Apparel & Luxury Goods		12.2
Capital Markets		7.5
Chemicals		7.4
Information Technology Services		7.3
Personal Products		5.2
Entertainment		5.0
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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Permanence Portfolio

Statement of Assets and Liabilities	June 30, 2019 (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value (Cost $1,953)	$	2,024
Investment in Security of Affiliated Issuer, at Value (Cost $38)		38
Total Investments in Securities, at Value (Cost $1,991)		2,062
Foreign Currency, at Value (Cost $3)		3
Cash		—	@
Prepaid Offering Costs		107
Due from Adviser		43
Dividends Receivable		1
Tax Reclaim Receivable		—	@
Receivable from Affiliate		—	@
Other Assets		1
Total Assets		2,217
Liabilities:
Payable for Offering Costs		120
Payable for Investments Purchased		4
Payable for Professional Fees		4
Payable for Custodian Fees		1
Payable for Transfer Agency Fees — Class I		—	@
Payable for Transfer Agency Fees — Class A		—	@
Payable for Shareholder Services Fees — Class A		—	@
Payable for Distribution and Shareholder Services Fees — Class C		—	@
Payable for Administration Fees		—	@
Other Liabilities		3
Total Liabilities		132
Net Assets	$	2,085
Net Assets Consist of:
Paid-in-Capital	$	2,015
Total Distributable Earnings		70
Net Assets	$	2,085
CLASS I:
Net Assets	$	2,055
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		198,495
Net Asset Value, Offering and Redemption Price Per Share	$	10.35
CLASS A:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Redemption Price Per Share	$	10.34
Maximum Sales Load		5.25	%
Maximum Sales Charge	$	0.57
Maximum Offering Price Per Share	$	10.91
CLASS C:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	10.33
CLASS IS:
Net Assets	$	10
Shares Outstanding $0.001 par value shares of beneficial interest (unlimited shares authorized) (not in 000's)		1,000
Net Asset Value, Offering and Redemption Price Per Share	$	10.35

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019 (unaudited)

Global Permanence Portfolio

Statement of Operations	Period from April 30, 2019^ to June 30, 2019 (000)
Investment Income:
Dividends from Securities of Unaffiliated Issuers (Net of $1 of Foreign Taxes Withheld)	$	5
Dividends from Security of Affiliated Issuer (Note G)		—	@
Total Investment Income		5
Expenses:
Offering Costs		22
Professional Fees		19
Advisory Fees (Note B)		3
Shareholder Reporting Fees		3
Custodian Fees (Note F)		1
Transfer Agency Fees — Class I (Note E)		—	@
Transfer Agency Fees — Class A (Note E)		—	@
Transfer Agency Fees — Class C (Note E)		—	@
Transfer Agency Fees — Class IS (Note E)		—	@
Shareholder Services Fees — Class A (Note D)		—	@
Distribution and Shareholder Services Fee — Class C (Note D)		—	@
Administration Fees (Note C)		—	@
Pricing Fees		—	@
Other Expenses		—	@
Total Expenses		48
Expenses Reimbursed by Adviser (Note B)		(42	)
Waiver of Advisory Fees (Note B)		(3	)
Reimbursement of Class Specific Expenses — Class I (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class A (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class C (Note B)		(—	@)
Reimbursement of Class Specific Expenses — Class IS (Note B)		(—	@)
Rebate from Morgan Stanley Affiliate (Note G)		(—	@)
Net Expenses		3
Net Investment Income		2
Realized Loss:
Investments Sold		(2	)
Foreign Currency Translation		(1	)
Net Realized Loss		(3	)
Change in Unrealized Appreciation (Depreciation):
Investments		71
Foreign Currency Translation		—	@
Net Change in Unrealized Appreciation (Depreciation)		71
Net Realized Loss and Change in Unrealized Appreciation (Depreciation)		68
Net Increase in Net Assets Resulting from Operations	$	70

^  Commencement of Operations.

@  Amount is less than $500.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Global Permanence Portfolio

Statement of Changes in Net Assets	Period from April 30, 2019^ to June 30, 2019 (unaudited) (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	2
Net Realized Loss		(3	)
Net Change in Unrealized Appreciation (Depreciation)		71
Net Increase in Net Assets Resulting from Operations		70
Capital Share Transactions:(1)
Class I:
Subscribed		1,985
Class A:
Subscribed		10
Class C:
Subscribed		10
Class IS:
Subscribed		10
Net Increase in Net Assets Resulting from Capital Share Transactions		2,015
Total Increase in Net Assets		2,085
Net Assets:
Beginning of Period		—
End of Period	$	2,085
(1)   Capital Share Transactions:
Class I:
Shares Subscribed		198
Class A:
Shares Subscribed		1
Class C:
Shares Subscribed		1
Class IS:
Shares Subscribed		1

^  Commencement of Operations.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Permanence Portfolio

	Class I
Selected Per Share Data and Ratios	Period from April 30, 2019(1) to June 30, 2019 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income from Investment Operations:
Net Investment Income(2)		0.01
Net Realized and Unrealized Gain		0.34
Total from Investment Operations		0.35
Net Asset Value, End of Period	$	10.35
Total Return(3)		3.50	%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	2,055
Ratio of Expenses Before Expense Limitation		14.38	%(6)
Ratio of Expenses After Expense Limitation		0.99	%(4)(6)
Ratio of Net Investment Income		0.71	%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)
Portfolio Turnover Rate		8	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Permanence Portfolio

	Class A
Selected Per Share Data and Ratios	Period from April 30, 2019(1) to June 30, 2019 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income from Investment Operations:
Net Investment Income(2)		0.01
Net Realized and Unrealized Gain		0.33
Total from Investment Operations		0.34
Net Asset Value, End of Period	$	10.34
Total Return(3)		3.40	%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10
Ratio of Expenses Before Expense Limitation		28.34	%(6)
Ratio of Expenses After Expense Limitation		1.34	%(4)(6)
Ratio of Net Investment Income		0.46	%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)
Portfolio Turnover Rate		8	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Permanence Portfolio

	Class C
Selected Per Share Data and Ratios	Period from April 30, 2019(1) to June 30, 2019 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income (Loss) from Investment Operations:
Net Investment Income(2)		0.00	(3)
Net Realized and Unrealized Gain		0.33
Total from Investment Operations		0.33
Net Asset Value, End of Period	$	10.33
Total Return(4)		3.30	%(7)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10
Ratio of Expenses Before Expense Limitation		29.12	%(8)
Ratio of Expenses After Expense Limitation		2.09	%(5)(8)
Ratio of Net Investment Income		0.00	%(5)(6)(8)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(8)
Portfolio Turnover Rate		8	%(7)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Amount is less than $0.005 per share.

(4)  Calculated based on the net asset value which does not reflect sales charges, if applicable, as of the last business day of the period.

(5)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(6)  Amount is less than 0.005%.

(7)  Not annualized.

(8)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Financial Highlights

Global Permanence Portfolio

	Class IS
Selected Per Share Data and Ratios	Period from April 30, 2019(1) to June 30, 2019 (unaudited)
Net Asset Value, Beginning of Period	$	10.00
Income from Investment Operations:
Net Investment Income(2)		0.02
Net Realized and Unrealized Gain		0.33
Total from Investment Operations		0.35
Net Asset Value, End of Period	$	10.35
Total Return(3)		3.50	%(5)
Ratios to Average Net Assets and Supplemental Data:
Net Assets, End of Period (Thousands)	$	10
Ratio of Expenses Before Expense Limitation		28.10	%(6)
Ratio of Expenses After Expense Limitation		0.94	%(4)(6)
Ratio of Net Investment Income		0.87	%(4)(6)
Ratio of Rebate from Morgan Stanley Affiliates		0.01	%(6)
Portfolio Turnover Rate		8	%(5)

(1)  Commencement of Operations.

(2)  Per share amount is based on average shares outstanding.

(3)  Calculated based on the net asset value as of the last business day of the period.

(4)  The Ratios of Expenses After Expense Limitation and Net Investment Income reflect the rebate of certain Fund 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."

(5)  Not annualized.

(6)  Annualized.

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

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited)

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

The accompanying financial statements relate to the Global Permanence Portfolio. The Fund seeks long-term capital appreciation.

The Fund commenced operations on April 30, 2019 and offers four classes of shares — Class I, Class A, Class C and Class IS.

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 Company 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.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement (Topic 820) — Disclosures Framework — Changes to Disclosure Requirements of Fair Value Measurement ("ASU 2018-13") which introduces new fair value disclosure requirements as well as eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 would be effective for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years; however, management has elected to early adopt ASU 2018-13 as permitted by the standard. The impact of the Fund's adoption was limited to changes in the Fund's financial statement disclosures regarding fair value, primarily those disclosures related to transfers between levels of the fair value hierarchy and disclosure of the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, when applicable.

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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant

exchanges. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (2) all other equity portfolio securities for which over-the-counter ("OTC") market quotations are readily available are valued at the latest reported sales price (or at the market official closing price if such market reports an official closing price), and if there was no trading in the security on a given day and if there is no official closing price from relevant markets for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant markets. An unlisted equity security that does not trade on the valuation date and for which bid and asked prices from the relevant markets are unavailable is valued at the mean between the current bid and asked prices obtained from one or more reputable brokers or dealers; (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 its latest bid and ask prices. Unlisted options are valued at the mean between their latest bid and ask prices from a broker/dealer or valued by a pricing service/vendor; (4) certain portfolio securities may be valued by an outside pricing service/vendor approved by the Company's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. Alternatively, if a valuation is not available from an outside pricing service/vendor, and the security trades on an exchange, the security may be valued at its latest reported sale price (or at the exchange official closing price if such exchange reports an official closing price), prior to the time when assets are valued. If there are no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available in the relevant exchanges; (5) when market quotations are not readily available, including circumstances under which Morgan Stanley Investment Management Inc. (the "Adviser") determines that the

13

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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; (6) 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; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Company's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Company's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Company's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Company to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

2.  Fair Value Measurement: FASB Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("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.

14

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2019:

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	$	68	$	21	$	—	$	89
Beverages		20		73		—		93
Capital Markets		154		—		—		154
Chemicals		136		17		—		153
Commercial Services & Supplies		222		75		—		297
Construction Materials		22		—		—		22
Containers & Packaging		34		—		—		34
Diversified Consumer Services		84		—		—		84
Entertainment		102		—		—		102
Food Products		21		—		—		21
Health Care Equipment & Supplies		74		—		—		74
Hotels, Restaurants & Leisure		30		32		—		62
Information Technology Services		151		—		—		151
Internet & Direct Marketing Retail		96		—		—		96
Machinery		—		20		—		20
Personal Products		32		75		—		107
Professional Services		53		—		—		53
Road & Rail		69		—		—		69
Textiles, Apparel & Luxury Goods		—		251		—		251
Transportation Infrastructure		29		62		—		91
Total Common Stocks		1,397		626		—		2,023
Call Option Purchased		—		1		—		1
Short-Term Investment
Investment Company		38		—		—		38
Total Assets	$	1,435	$	627	$	—	$	2,062

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

3.  Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars 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 Fund are presented at the foreign exchange rates and market values at the close of

the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) 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 Fund's books and the U.S. dollar equivalent amounts actually received or paid. The change in unrealized currency gains (losses) on foreign currency transactions 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,

15

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

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 Fund values the foreign shares at the closing exchange price of the local shares.

4.  Derivatives: The Fund 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 Fund'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 Fund 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 ("SEC") rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund'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 Fund used during the period and their associated risks:

Options: With respect to options, the Fund is subject to equity risk, interest rate risk and foreign currency exchange risk in the normal course of pursuing its investment objectives. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium paid by the Fund. The Fund may purchase and/or sell put and call options. Purchasing call options tends to increase the Fund's exposure to the underlying (or similar) instrument. Purchasing put options tends to decrease the Fund's exposure to the underlying (or similar) instrument. When entering into purchased option contracts, the Fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the Fund 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 in Securities" in the Statement of Assets and Liabilities. Premiums paid for purchasing options which expired are treated as realized losses. If the Fund sells an option, it sells to another party the right to buy from or sell to the Fund a specific amount of the underlying instrument or foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased OTC, the Fund 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 Fund 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" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to

16

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2019:

	Asset Derivatives Statement of Assets and Liabilities Location	Primary Risk Exposure	Value (000)
Purchased Options	Investments, at Value (Purchased Options)	Currency Risk	$	1	(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 Fund's change in unrealized appreciation (depreciation) by type of derivative contract for the period ended June 30, 2019 in accordance with ASC 815:

Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Investments (Purchased Options)	$	(1	)(b)

(b) Amounts are included in Investments in the Statement of Operations.

At June 30, 2019, the Fund'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)
Purchased Options	$	1	(a)	$	—

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

(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 Fund 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 Fund 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 potential 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 Fund 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 Fund 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 Fund'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, 2019:

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Asset Derivatives Presented in the Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)		Net Amount (not less than $0) (000)
Royal Bank of Scotland	$	1	(a)	$	—	$	—	$	1

(a) Amounts are included in Investments in Securities in the Statement of Assets and Liabilities.

For the period ended June 30, 2019, the approximate average monthly amount outstanding for each derivative type is as follows:

Purchased Options:
Average monthly notional amount	132,000

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

6.  Dividends and Distributions to Shareholders: Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment

17

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

income, if any, are declared and paid annually. Net realized capital gains, if any, are distributed at least annually.

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. Dividend income and other distributions are recorded on the ex-dividend date (except for certain foreign dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes. 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 Company can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets or other appropriate methods. Income, expenses (other than class specific expenses — distribution and shareholder services, transfer agency and sub transfer agency fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.

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

First $1 billion			Over $1 billion
	0.80	%		0.75	%

For the period ended June 30, 2019, the advisory fee rate (net of waiver/rebate) was equivalent to an annual effective rate of 0.00% of the Fund's average daily net assets.

The Adviser has agreed to reduce its advisory fee and/or reimburse the Fund so that total annual portfolio operating expenses, excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), will not exceed 1.00% for Class I shares, 1.35% for Class A shares, 2.10% for Class C shares and 0.95% for Class IS shares. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus 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 period ended June 30, 2019, approximately $3,000 of advisory fees were

waived and approximately $42,000 of other expenses were reimbursed by the Adviser pursuant to this arrangement.

C. Administration Fees: The Adviser also serves as Administrator to the Company and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund'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 Company. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Distribution and Shareholder Services 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 Company's Distributor of Fund shares pursuant to a Distribution Agreement. The Company has adopted a Shareholder Services Plan with respect to Class A shares pursuant to Rule 12b-1 under the Act. Under the Shareholder Services Plan, the Fund pays the Distributor a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares.

The Company has adopted a Distribution and Shareholder Services Plan with respect to Class C shares pursuant to Rule 12b-1 under the Act. Under the Distribution and Shareholder Services Plan, the Fund pays the Distributor a distribution fee, accrued daily and paid monthly, at an annual rate of 0.75% and a shareholder services fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Fund's average daily net assets attributable to Class C shares.

The distribution and shareholder services fees are used to support the expenses associated with servicing and maintaining accounts. The Distributor may compensate other parties for providing shareholder support services to investors who purchase Class A and Class C shares.

E. Dividend Disbursing and Transfer Agent: The Company's dividend disbursing and transfer agent is DST Asset Manager Solutions, Inc. ("DST"). Pursuant to a Transfer Agency Agreement, the Company pays DST a fee based on the number of classes, accounts and transactions relating to the Funds of the Company.

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

18

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Notes to Financial Statements (unaudited) (cont'd)

Agreement. The Custodian holds cash, securities and other assets of the Company 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. Security Transactions and Transactions with Affiliates: For the period ended June 30, 2019, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $289,000 and $149,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the period ended June 30, 2019.

The Fund 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 Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the period ended June 30, 2019, advisory fees paid were reduced by less than $500 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of affiliated investments during the period ended June 30, 2019 is as follows:

Affiliated Investment Company	Value April 30, 2019 (000)		Purchases at Cost (000)		Proceeds from Sales (000)		Dividend Income (000)
Liquidity Funds	$	—	$	2,064	$	2,026	$	—	@

Affiliated Investment Company (cont'd)	Realized Gain (Loss) (000)		Change in Unrealized Appreciation (Depreciation) (000)		Value June 30, 2019 (000)
Liquidity Funds	$	—	$	—	$	38

@ Amount is less than $500.

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley Funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Directors in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the period ended June 30, 2019, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion of the fees he or she receives

for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

H. Federal Income Taxes: It is the Fund'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 Fund 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 Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states.

I. Credit Facility: The Company and other Morgan Stanley funds participated in a $300,000,000 committed, unsecured revolving line of credit facility (the "Facility") with State Street. This Facility is to be used for temporary emergency purposes or funding of shareholder redemption requests. The interest rate on borrowings is based on the federal funds rate or 1 month LIBOR rate plus a spread. The Facility also has a commitment fee of 0.25% per annum based on the unused portion of the Facility. During the period ended June 30, 2019, the Fund did not have any borrowings under the Facility.

J. Other: At June 30, 2019, the Company had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Company. The aggregate percentage of such owners was 24.8%.

19

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Investment Advisory Agreement Approval (unaudited)

The Board considered the following factors at the time of approval of the contracts which occurred prior to commencement of operations.

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 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 to be provided by the Administrator under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The Adviser and Administrator together are referred to as the "Adviser" and the advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers.

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 advisory and administrative services to the Fund. 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 Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board considered that the Adviser plans to arrange for a public offering of shares of the Fund to raise assets for investment and that the offering had not yet begun and concluded that, since the Fund currently had no assets to invest (other than seed capital required under the Investment Company Act) 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 Fund under the Management Agreement relative to comparable funds advised by the Adviser, when applicable, and compared to their peers as determined by the Adviser, and reviewed the anticipated total expense ratio of the Fund. The Board considered that the Fund requires the Adviser to develop processes, invest in additional resources and incur additional risks to successfully manage the Fund and concluded that the proposed management fee rate and anticipated total expense ratio would be competitive with its peer group averages.

Economies of Scale

The Board considered the growth prospects of the Fund and the structure of the proposed management fee schedule, which includes a breakpoint. The Board considered that the Fund'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 Fund 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 direct and indirect benefits to the Adviser and/or its affiliates to be derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading. Since the Fund 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.

20

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

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

Resources of the Adviser and Historical Relationship Between the Fund 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 organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund'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 Fund 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 Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund 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 piece of information or factor referenced above. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

21

Privacy Notice (unaudited)

FACTS	WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include: n Social Security number and income n investment experience and risk tolerance n checking account number and wire transfer instructions
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MSIM share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes — information about your transactions and experiences	Yes	No
For our affiliates' everyday business purposes — information about your creditworthiness	No	We don't share
For our affiliates to market to you	No	We don't share
For non-affiliates to market to you	No	We don't share

Questions?Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com

22

Privacy Notice (unaudited) (cont'd)

Who we are
Who is providing this notice?	Morgan Stanley Investment Management, Inc. and its affiliated registered investment advisers, registered broker-dealers, and registered and unregistered funds ("MSIM")
What we do
How does MSIM protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information.
How does MSIM collect my personal information?	We collect your personal information, for example, when you n open an account or make deposits or withdrawals from your account n buy securities from us or make a wire transfer n give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only n sharing for affiliates' everyday business purposes — information about your creditworthiness n affiliates from using your information to market to you n sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and non-financial companies. nOur affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. nMSIM does not share with non-affiliates so they can market to you.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. nMSIM doesn't jointly market
Other Important Information

Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

California: Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

23

Morgan Stanley Institutional Fund, Inc.

Semi-Annual Report — June 30, 2019

Director and Officer Information (unaudited)

Directors

Frank L. Bowman
Kathleen A. Dennis
Nancy C. Everett
Jakki L. Haussler
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael F. Klein
Patricia Maleski
Michael E. Nugent, Chair of the Board
W. Allen Reed

Officers

John H. Gernon
President and Principal Executive Officer

Timothy J. Knierim
Chief Compliance Officer

Mary E. Mullin
Secretary

Francis J. Smith
Treasurer and Principal Financial Officer

Michael J. Key
Vice President

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

DST Asset Manager Solutions, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169

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

Perkins Coie LLP
1155 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 the Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual and Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. 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/shareholderreports. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT. 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-PORT filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. 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).

Proxy Voting Policies and Procedures and Proxy Voting Record

You may obtain a copy of the Company's Proxy Voting Policy and Procedures and information regarding how the Company 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/shareholderreports. This information is also available on the SEC's website at www.sec.gov.

This report is authorized for distribution only when preceded or accompanied by a prospectus or summary prospectus of the applicable fund of Morgan Stanley Institutional Fund, Inc., which describes in detail the fund's investment policies, risks, fees and expenses. Please read the prospectus carefully before you invest or send money. For additional information, including information regarding the investments comprising the Fund, please visit our website at www.morganstanley.com/im/shareholderreports or call toll free 1 (800) 548-7786.

24

Printed in U.S.A.
This Report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus.

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

© 2019 Morgan Stanley. Morgan Stanley Distribution, Inc.

IFIGPERMSAN
2663970 EXP. 08.31.20

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.

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

There have been no material changes to the procedures by which shareholders may recommend nominee to the Fund’s Board of Directors since the Fund last provided disclosure in response to this item.

Item 11. Controls and Procedures

(a)  The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the registrant 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 most recent fiscal half-year 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. Disclosure of Securities Lending Activities for Closed End Management Investment Companies.

Not Applicable.

Item 13. 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.

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 Institutional Fund, Inc.

/s/ John H. Gernon

John H. Gernon

Principal Executive Officer

August 15, 2019

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 15, 2019

/s/ Francis Smith

Francis Smith

Principal Financial Officer

August 15, 2019