Morgan Stanley Investment Funds (MS INVF)

Global Opportunity Fund

ACTIVE FUNDAMENTAL EQUITY | GLOBAL OPPORTUNITY TEAM FUND OVERVIEW | 31 MARCH 2020

The foremost distinction of the MS INVF Global Opportunity Fund is that itinvests in high quality companies that the investment team believes areundervalued at the time of purchase.

Investment Process

The Fund follows a five-step investment process incorporating ideageneration, quality assessment, valuation, risk management and portfolioconstruction.

1) Idea generation comes from screening, contact networks, patternrecognition, disruptive change research and our extensive reading.

2) Quality assessment – When we formulate our investment thesis onthe quality of a company, we ask three key questions to determine thesustainability of competitive advantage and how it can be monetizedthrough growth:

Is the company a disruptor or is it insulated from disruptive change?Does the company demonstrate financial strength with high returns oninvested capital, high margins, strong cash conversion, low capitalintensity and low leverage?Are there environmental or social externalities not borne by the company,or governance and accounting risks that may alter the investment thesis?

Competitive advantages we favor include pricing power, differentiatedcompetitive strategies, habitual services, consumable products, recurringrevenue and limited threat from substitutes, rivals, suppliers, customers andregulators.

Growth characteristics we seek include scalable business models that createvalue for happy customers, organic over acquisitive, secular over cyclicalwith a good mix between unit and pricing growth.

3) Valuation focuses on the ratio of price to value derived from the keyvalue drivers pricing, units, margin and multiple that determine the presentvalue of free cash flow generation over a five-year time horizon.

4) Risk management – We define risk in absolute terms: risk is losingmoney. We believe that idiosyncratic risk can be reduced by addressing whatmatters at the company level. We limit valuation risk by not paying a pricethat exceeds our estimate of value. We limit sustainability risk by analyzingthe threat of disruption, financial strength and ESG externalities. We limitfundamental risk of deteriorating competitive advantage and growthopportunities. Portfolio risks are mitigated by reducing correlated factorexposures with the support of monthly reports from portfolio attribution

and risk teams.

5) Portfolio construction – We buy when the quality is high and the priceis below our estimate of intrinsic value. We weight the portfolio based onlow price to value, high certainty of value drivers and low correlationbetween ideas. The result of our bottom-up investment process is abenchmark agnostic, highly differentiated portfolio concentrated in ourhighest conviction ideas.

Competitive Advantages

CULTURE

The culture of the investment team is shaped by the cultivation of corevalues that are cultivated and reinforced in many ways: intellectual curiosityand flexibility, perspective, self-awareness and partnership.

READING NETWORK

As part of Counterpoint Global, the Global Opportunity team has access to areading network that includes more than 100 investor and non-investorparticipants at Morgan Stanley. This allows the team to leverage thedistributed knowledge of the firm and encourages cross-disciplinary thinking.Each week the team circulates articles, essays and thought pieces from awide range of sources outside mainstream Wall Street in order to helpenhance its knowledge and inform investment decisions.

What Is High Quality?

MORG AN S TAN LEY IN VES T MEN T FU N DS (MS IN VF)

Warren Buffett InvestmentPrinciples Applied to GrowingCompanies

The team applies what they believe to be investment principles similar to those of Warren Buffett. No representation is being made that the team’sinvestment results will be similar to those produced by investment portfolios managed by Warren Buffett.This represents how the portfolio management team generally implements its investment process under normal market conditions and is being provided forinformational purposes only.

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Share Class Z Risk and Reward Profile

The risk and reward category shown is based on historic data.Historic figures are only a guide and may not be a reliable indicator ofwhat may happen in the future.As such this category may change in the future.The higher the category, the greater the potential reward, but also thegreater the risk of losing the investment. Category 1 does not indicate arisk free investment.The fund is in this category because it invests in company shares andthe fund's simulated and/or realised return has experienced high risesand falls historically.The fund may be impacted by movements in the exchange ratesbetween the fund's currency and the currencies of the fund'sinvestments.

This rating does not take into account other risk factors which should beconsidered before investing, these include:

The fund relies on other parties to fulfill certain services, investmentsor transactions. If these parties become insolvent, it may expose thefund to financial loss.There may be an insufficient number of buyers or sellers which mayaffect the funds ability to buy or sell securities.Investment in China A-Shares via Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs may also entail additional risks,such as risks linked to the ownership of shares.There are increased risks of investing in emerging markets as political,legal and operational systems may be less developed than indeveloped markets.Past performance is not a reliable indicator of future results. Returnsmay increase or decrease as a result of currency fluctuations. Thevalue of investments and the income from them can go down as wellas up and investors may lose all or a substantial portion of his or herinvestment.The value of the investments and the income from them will vary andthere can be no assurance that the Fund will achieve its investmentobjectives.Investments may be in a variety of currencies and therefore changes inrates of exchange between currencies may cause the value ofinvestments to decrease or increase. Furthermore, the value ofinvestments may be adversely affected by fluctuations in exchangerates between the investor’s reference currency and the base currencyof the investments.

G LOBAL OPPORT U N IT Y FU N D

Morningstar Overall Rating*CLASS Z SHARES

EAA Fund Global Large-Cap Growth EquityOut of 1184 Funds. Based on Risk Adjusted Return.Ratings as of 31/03/2020.

Investment Team INVESTMENT EXPERIENCE

Kristian Heugh, 19 years

Team members may be subject to change at any time without notice.

Differentiators

1. Strong team culture

The team’s culture fosters collaboration, creativity, a willingness to thinkdifferently, and continued evolution and innovation—which has resultedin stability and consistency within the team.

2. Emphasis on quality and long-term ownership

The investment team seeks companies with sustainable competitiveadvantages and long-term growth that creates value, rather than focusingon short-term events, with stock selection informed by rigorousfundamental analysis.

3. Actively managed

The team builds concentrated, high active share portfolios that aredifferentiated from the benchmark and focused on the highest convictionideas. Active share is generally 90% or higher, and the Fund’s top 10holdings typically account for around 40-50% of the portfolio.

Source: Morgan Stanley Investment Management. Active share is theproportion of a portfolio’s holdings that differ from those of itsbenchmark. The MSCI All Country World Index (MSCI ACWI) is used as abenchmark. The number of holdings provided is a typical range, not amaximum number. The portfolio may exceed this from time to time due tomarket conditions and outstanding trades.

MS INVF Global Opportunity Fund

Class Z (% net of fees) Performance of 100 USD Invested Since Inception (30 November 2010)

12 Month Performance Periods to Latest Month End (%)

MARCH '19MARCH '19 - - MARCH '20MARCH '20

MARCH '18MARCH '18 - - MARCH '19MARCH '19

MARCH '17MARCH '17 - - MARCH '18MARCH '18

MARCH '16MARCH '16 - - MARCH '17MARCH '17

MARCH '15MARCH '15 - - MARCH '16MARCH '16

Class Z Shares 1.81 7.24 34.19 20.98 7.12

MSCI All Country World Index -11.26 2.60 14.85 15.04 -4.34Past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations. Allperformance data is calculated NAV to NAV, net of fees, and does not take account of commissions and costs incurred on the issue andredemption of units. The sources for all performance and Index data is Morgan Stanley Investment Management. All data is as of 31March 2020 and subject to change daily. Please visit our website www.morganstanley.com/im to see the latest performance returns forthe fund’s other share classes.

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Managing Director

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Class Z Shares MSCI All Country World Index

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150

200

250

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350

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Nov-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-17 Oct-18 Oct-19Mar-20

Lower Risk Higher Risk

Potentially Lower Rewards Potentially Higher Rewards

DEFINITIONS

Free cash flow is a measure of a company’s financial performance,calculated as operating cash flow minus capital expenditures. It representsthe cash that a company is able to generate after spending the moneyrequired to maintain or expand its asset base.

INDEX INFORMATION

The MSCI All Country World Index (ACWI) is a free float-adjustedmarket capitalization weighted index designed to measure the equity marketperformance of developed and emerging markets. The term "free float"represents the portion of shares outstanding that are deemed to be availablefor purchase in the public equity markets by investors. The performance ofthe Index is listed in U.S. dollars and assumes reinvestment of net dividends.

DISTRIBUTION

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the content of prospectuses does not apply, and investors should considercarefully whether the investment is suitable for them. This publication hasnot been reviewed by the Monetary Authority of Singapore.

IMPORTANT INFORMATION

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This document contains information relating to the sub-fund ("Fund") ofMorgan Stanley Investment Funds, a Luxembourg domiciled Sociétéd’Investissement à Capital Variable. Morgan Stanley Investment Funds (the“Company”) is registered in the Grand Duchy of Luxembourg as anundertaking for collective investment pursuant to Part 1 of the Law of 17thDecember 2010, as amended. The Company is an Undertaking for CollectiveInvestment in Transferable Securities (“UCITS”).

Applications for shares in the Fund should not be made without firstconsulting the current Prospectus, Key Investor Information Document("KIID"), Annual Report and Semi-Annual Report (“Offering Documents”), orother documents available in your local jurisdiction which is available free ofcharge from the Registered Office: European Bank and Business Centre, 6Broute de Trèves, L-2633 Senningerberg, R.C.S. Luxemburg B 29 192. Inaddition, all Italian investors should refer to the ‘Extended Application Form’,and all Hong Kong investors should refer to the ‘Additional Information forHong Kong Investors’ section, outlined within the Prospectus. Copies of theProspectus, KIID, the Articles of Incorporation and the annual and semi-annual reports, in German, and further information can be obtained free ofcharge from the representative in Switzerland. The representative inSwitzerland is Carnegie Fund Services S.A., 11, rue du Général-Dufour, 1204Geneva. The paying agent in Switzerland is Banque Cantonale de Genève, 17,quai de l’Ile, 1204 Geneva. The document has been prepared solely forinformational purposes and does not constitute an offer or arecommendation to buy or sell any particular security or to adopt anyspecific investment strategy.

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The views and opinions expressed are those of the portfolio managementteam at the time of writing/of this presentation and are subject to change atany time due to market, economic, or other conditions, and may notnecessarily come to pass. These comments are not representative of theopinions and views of the firm as a whole.

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All information contained herein is proprietary and is protected undercopyright law.

MORG AN S TAN LEY IN VES T MEN T FU N DS (MS IN VF)

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*MORNINGSTAR

The Morningstar Rating™ for funds, or "star rating", is calculated formanaged products (including mutual funds, variable annuity and variablelife subaccounts, exchange-traded funds, closed-end funds, and separateaccounts) with at least a three-year history. Exchange-traded funds andopen-ended mutual funds are considered a single population forcomparative purposes. It is calculated based on a MorningstarRisk-Adjusted Return measure that accounts for variation in a managedproduct's monthly excess performance, placing more emphasis ondownward variations and rewarding consistent performance. The top 10%of products in each product category receive 5 stars, the next 22.5% receive4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and thebottom 10% receive 1 star. The Overall Morningstar Rating for a managedproduct is derived from a weighted average of the performance figuresassociated with its three-, five-, and 10-year (if applicable) MorningstarRating metrics. The weights are: 100% three-year rating for 36-59 months oftotal returns, 60% five-year rating/40% three-year rating for 60-119 monthsof total returns, and 50% 10-year rating/30% five-year rating/20%three-year rating for 120 or more months of total returns. While the 10-yearoverall star rating formula seems to give the most weight to the 10-yearperiod, the most recent three-year period actually has the greatest impactbecause it is included in all three rating periods. Ratings do not take into

account sales loads.

The Europe/Asia and South Africa category (EAA) includes fundsdomiciled in European markets, major cross-border Asian markets wherematerial numbers of European UCITS funds are available (principally HongKong, Singapore and Taiwan), South Africa, and selected other Asian andAfrican markets where Morningstar believes it is of benefit to investors forthe funds to be included in the EAA classification system.

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