NPORT-EX 2 NPORT_MGAZ_6853446861.htm

 

Morgan Stanley Europe Opportunity Fund, Inc. 

Consolidated Portfolio of Investments ▪ July 31, 2021 (unaudited)

 

NUMBER OF
SHARES
      VALUE 
     Common Stocks (92.8%)     
     Denmark (7.7%)     
     Air Freight & Logistics     
 103,949   DSV Panalpina A/S  $25,339,113 
     France (10.0%)     
     Beverages     
 38,707   Pernod Ricard SA   8,542,887 
     Software     
 160,496   Dassault Systemes SE   8,853,312 
     Textiles, Apparel & Luxury Goods     
 10,180   Hermes International   15,562,938 
     Total France   32,959,137 
     Germany (13.5%)     
     Internet & Direct Marketing Retail     
 208,858   HelloFresh SE (a)   19,578,219 
     Textiles, Apparel & Luxury Goods     
 29,885   Adidas AG   10,846,862 
 113,362   Puma SE   13,906,047 
         24,752,909 
     Total Germany   44,331,128 
     Italy (8.0%)     
     Beverages     
 980,503   Davide Campari-Milano N.V.   13,784,436 
     Textiles, Apparel & Luxury Goods     
 180,723   Moncler SpA   12,412,541 
     Total Italy   26,196,977 
     Netherlands (10.3%)     
     Information Technology Services     
 4,854   Adyen N.V. (a)   13,154,578 
     Internet & Direct Marketing Retail     
 80,268   Just Eat Takeaway.com N.V (a)   7,127,853 
     Semiconductors & Semiconductor Equipment     
 17,856   ASML Holding N.V.   13,648,837 
     Total Netherlands   33,931,268 
     Norway (0.8%)     
     Entertainment     
 627,475   Kahoot! ASA (a)   2,792,520 
     Sweden (7.9%)     
     Biotechnology     
 79,715   Vitrolife AB   4,542,590 
     Hotels, Restaurants & Leisure     
 123,568   Evolution AB   21,500,859 
     Total Sweden   26,043,449 
     Switzerland (10.9%)     
     Food Products     
 76   Chocoladefabriken Lindt & Spruengli AG (Registered)   8,803,671 
     Health Care Equipment & Supplies     
 8,630   Straumann Holding AG (Registered)   16,000,177 
     Marine     
 32,463   Kuehne & Nagel International AG (Registered)   10,950,841 
     Total Switzerland   35,754,689 

 

 

 

 

Morgan Stanley Europe Opportunity Fund, Inc. 

Consolidated Portfolio of Investments ▪ July 31, 2021 (unaudited) continued

 

     United Kingdom (13.9%)     
     Beverages     
 191,720   Diageo PLC   9,506,677 
 95,644   Fevertree Drinks PLC   3,180,704 
         12,687,381 
     Biotechnology     
 410,205   Abcam PLC (a)   7,755,931 
     Interactive Media & Services     
 1,565,033   Rightmove PLC   15,266,046 
     Internet & Direct Marketing Retail     
 2,208,178   Deliveroo PLC (a)(b)   10,153,965 
     Total United Kingdom   45,863,323 
     United States (9.8%)     
     Entertainment     
 59,051   Spotify Technology SA (a)   13,503,192 
     Information Technology Services     
 14,973   EPAM Systems, Inc. (a)   8,381,885 
     Internet & Direct Marketing Retail     
 207,032   Farfetch Ltd., Class A (a)   10,376,444 
     Total United States   32,261,521 
     Total Common Stocks (Cost $199,532,962)   305,473,125 
     Investment Company (0.6%)     
     United States (0.6%)     
 58,116   Grayscale Bitcoin Trust (a) (Cost $2,409,131)   2,018,659 

 

NUMBER OF
SHARES
(000)
        
     Short-Term Investments (5.8%)     
     Securities held as Collateral on Loaned Securities (0.7%)     
     Investment Company (0.6%)     
 2,030   Morgan Stanley Institutional Liquidity Funds - Treasury Securities Portfolio - Institutional Class (c) (Cost $2,029,531)   2,029,531 

 

PRINCIPAL
AMOUNT
(000)
        
     Repurchase Agreements (0.1%)     
$112   HSBC Securities USA, Inc. (0.05%, dated 7/30/21, due 8/2/21; proceeds $111,820; fully collateralized by U.S. Government obligations; 0.00% - 6.13% due 11/15/23 - 8/15/29; valued at $114,056)   111,820 
 268   Merrill Lynch & Co., Inc. (0.05%, dated 7/30/21, due 8/2/21; proceeds $268,368; fully collateralized by a U.S. Government obligation; 1.50% due 8/15/26; valued at $273,736)   268,368 
     Total Repurchase Agreements (Cost $380,188)   380,188 
     Total Securities held as Collateral on Loaned Securities (Cost $2,409,719)   2,409,719 

 

 

 

 

Morgan Stanley Europe Opportunity Fund, Inc. 

Consolidated Portfolio of Investments ▪ July 31, 2021 (unaudited) continued

 

NUMBER OF
SHARES
(000)
                 
        Investment Company (5.1%)              
  16,707     Morgan Stanley Institutional Liquidity Funds - Treasury Securities Portfolio - Institutional Class (c) (Cost $16,706,661)             16,706,661  
        Total Short-Term Investments (Cost $19,116,380)             19,116,380  
                         
        Total Investments (Cost $221,058,473) including $9,920,619 of Securities Loaned (d)(e)(f)     99.2 %     326,608,164  
        Other Assets in Excess of Liabilities     0.8       2,604,171  
        Net Assets     100.0 %   $ 329,212,335  

 

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. The value of loaned securities and related collateral outstanding at July 31, 2021, were $9,920,619 and $10,304,338 respectively. The Fund received cash collateral of $2,426,098, of which $2,409,719 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds - Treasury Securities Portfolio - Institutional Class as reported in the Consolidated Portfolio of Investments. The Fund received non-cash collateral of approximately $7,878,241 in the form of U.S. Government obligations, which the Fund cannot sell or re-pledge, and accordingly are not reflected in the Consolidated Portfolio of Investments. At July 31, 2021, there was uninvested cash collateral of $16,379 which is not reflected in the Consolidated Portfolio of Investments. The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand.
(c) 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 nine months ended July 31, 2021, advisory fees paid were reduced by $6,480 relating to the Fund's investment in the Liquidity Funds.
(d) The fair value and percentage of net assets, $273,211,604 and 83.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in the Notes to the Consolidated Portfolio of Investments.
(e) 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 nine months ended July 31, 2021, the Fund did not engage in any cross-trade transactions.
(f) At July 31, 2021, the aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $110,647,363 and the aggregate gross unrealized depreciation is $5,097,672, resulting in net unrealized appreciation of $105,549,691.

 

 

 

 

Consolidated Summary of Investments

 

INDUSTRY  VALUE   PERCENT OF
TOTAL
INVESTMENTS
 
Textiles, Apparel & Luxury Goods   $52,728,388   16.3 %
Internet & Direct Marketing Retail    47,236,481   14.6  
Beverages    35,014,704   10.8  
Air Freight & Logistics    25,339,113   7.8  
Information Technology Services    21,536,463   6.7  
Hotels, Restaurants & Leisure    21,500,859   6.6  
Investment Companies    18,725,320   5.8  
Entertainment    16,295,712   5.0  
Health Care Equipment & Supplies    16,000,177   4.9  
Interactive Media & Services    15,266,046   4.7  
Semiconductors & Semiconductor Equipment    13,648,837   4.2  
Biotechnology    12,298,521   3.8  
Marine    10,950,841   3.4  
Software    8,853,312   2.7  
Food Products    8,803,671   2.7  
Total Investments   $324,198,445+  100.0 %

 

+ Does not reflect the value of securities held as collateral on loaned securities.

 

 

 

 

Morgan Stanley Europe Opportunity Fund, Inc. 

Notes to Consolidated Portfolio of Investments ▪ July 31, 2021 (unaudited)

 

Valuation of Investments - (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. If only bid prices are available then the latest bid price may be used. 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 Fund'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. If only bid prices are available then the latest bid price may be used. If Morgan Stanley Investment Management Inc. (the “Adviser”) or Morgan Stanley Investment Management Company (“MSIM Company”) (the “Sub-Adviser”), a wholly-owned subsidiary of Morgan Stanley, determines that the price provided by the outside pricing service/vendor or exchange does not reflect the security’s fair value or is unable to provide a price, prices from brokers or dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from brokers or dealers; (4) when market quotations are not readily available, including circumstances under which the Adviser or the Sub-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 on 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 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 Fund’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 Fund's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Fund’s valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

 

 

 

 

Fair Valuation Measurements

 

Financial Accounting Standards Board (“FASB”) Accounting Standards CodificationTM ("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 July 31, 2021:

 

INVESTMENT TYPE  LEVEL 1
UNADJUSTED
QUOTED
PRICES
   LEVEL 2
OTHER
SIGNIFICANT
OBSERVABLE
INPUTS
   LEVEL 3
SIGNIFICANT
UNOBSERVABLE
INPUTS
   TOTAL 
                 
Assets:
Common Stocks                    
Air Freight & Logistics  $   $25,339,113   $   $25,339,113 
Beverages       35,014,704        35,014,704 
Biotechnology       12,298,521                         —    12,298,521 
Entertainment   13,503,192    2,792,520        16,295,712 
Food Products       8,803,671        8,803,671 
Health Care Equipment & Supplies       16,000,177        16,000,177 
Hotels, Restaurants & Leisure       21,500,859        21,500,859 
Information Technology Services   8,381,885    13,154,578        21,536,463 
Interactive Media & Services       15,266,046        15,266,046 
Internet & Direct Marketing Retail   10,376,444    36,860,037        47,236,481 
Marine       10,950,841        10,950,841 
Semiconductors & Semiconductor Equipment       13,648,837        13,648,837 
Software       8,853,312        8,853,312 
Textiles, Apparel & Luxury Goods       52,728,388        52,728,388 
Total Common Stocks   32,261,521    273,211,604        305,473,125 
Investment Company   2,018,659            2,018,659 
Short-Term Investments                    
Investment Company   18,736,192            18,736,192 
Repurchase Agreements       380,188        380,188 
Total Short-Term Investments   18,736,192    380,188        19,116,380 
Total Assets  $53,016,372   $273,591,792   $   $326,608,164 

 

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