Morgan Stanley Investment Funds (MS INVF)

Global Brands Equity Income Fund

ACTIVE FUNDAMENTAL EQUITY | INTERNATIONAL EQUITY TEAM FUND OVERVIEW | MARCH 2018

We believe a portfolio of high-quality stocks, built on hard to replicate intangible assets, such as brands, licenses or networks, has the potential to generate attractive returns and offer downside protection when it is needed most.

Our high-quality bias in stock selection means dividends of these companies are more likely to be sustainable and growing.

Logos reproduced with the permission of Unilever, Reckitt Benckiser, L’Oreal, Davide Campari, Microsoft, Coca-Cola and Accenture represent companies in which the Fund invests.

Morgan Stanley Investment Funds (MS INVF)

Global Brands Equity Income FundA natural extension of our MS INVF Global Brands Fund, the MS INVF Global Brands Equity Income Fund builds on our proven track record of investing in high-quality companies with high-quality management teams that can compound shareholder wealth over the long term.

1MS INVF GLOBAL BRANDS EQUITY INCOME FUND | MORGAN STANLEY INVESTMENT MANAGEMENT

Income, the Right WayGlobal Brands Equity Income is designed to offer access to the same high-quality stock selection of the Global Brands Fund, with an enhanced income profile for clients seeking additional yield.

High Quality IncomeThe Global Brands Equity Income (GBEI) Fund recognizes that high-quality income – a sustainable and growing dividend stream – is best sourced from high-quality companies which generate sustainable free cash flows. We differ from traditional equity income funds because the dividend is an output of our thinking, not an input.

As a result, our portfolio consists not of companies with the highest forecast yields, but of those with the most sustainable yields. Studies have shown that high forecast yields often do not materialize. The market is right more than wrong. Hence lower, but more reliable, dividends should have the edge.

The Fund generates income from a combination of dividends from high-quality stocks and the premiums from selling index call options. Like Global Brands, the Fund seeks to deliver attractive returns over a full market cycle.

We believe the best foundation for any income investor remains a disciplined focus on high-quality companies with the cash flows to support robust and growing dividends.

3 REASONS TO CONSIDER

SHARE CLASS ISIN BLOOMBERG

Class A LU1378879321 MSIGBEA LX

Class AHR (EUR)

LU1378880410 MSIGAHE LX

Class AR LU1378879594 MSIGBAR LX

Class B LU1378879677 MSIGBEB LX

Class BHR (EUR)

LU1378880683 MSIGBHR LX

Class BR LU1378879750 MSIGBBR LX

Class CHR (EUR)

LU1378880766 MSIGCHR LX

Class CR LU1378879917 MSIGBCR LX

Class IR LU1378880097 MSIGBIR LX

Class Z LU1378880170 MSIGBEZ LX

Class ZR LU1378880337 MSIGBZR LX

An R suffix in the name of a share class denotes a distributing share class.

FUND SNAPSHOTLaunch DateApril 29, 2016

Current Yield target4% p.a.*Distributing share classes will pay out the yield quarterly, gross of fees.

Quality Income with Capital Growth and a Measure of Downside Protection

Optimized Yield Enhancement

An Expert Investment Team 1 2 3

* Yield target subject to change.

2 MORGAN STANLEY INVESTMENT MANAGEMENT | MS INVF GLOBAL BRANDS EQUITY INCOME FUND

Global Brands Equity Income focuses on sectors such as Consumer Staples, IT Software and Services and Media. It steers clear of sectors such as Utilities, Banks or Energy, which we believe are low return, capital intensive, commodity-driven sectors that lack pricing power. It avoids sectors that are often favored by traditional yield-maximizing income strategies.

We aim to invest in compounders, i.e. companies with the ability to consistently compound shareholder wealth at superior rates of return over the long term. A compounder is able to grow steadily and is relatively robust in economic downturns. The resilience of its earnings stream drives the resilience of its free cash flows, allowing management to continue to reinvest in the business at attractive returns on capital and/or return capital to shareholders.

To this end, we focus on a company’s ability to generate attractive returns on operating capital (ROOCE) built on recurring revenues and high gross margins, which are maintained by pricing power from innovation, advertising and promotion. These high and sustainable profits, combined with low capital intensity, produce sustainable and growing free cash flows, which then funds more sustainable dividends.

Quality Income with Capital Growth and a Measure of Downside Protection1

The Power of Compounding Morgan Stanley Global Franchise Composite (USD) Since Inception to March 31, 2018 (Growth of $100)

Historically Superior Dividend GrowthMS INVF Global Brands Trailing Dividends per $100k initial fund investment

Global Franchise Composite Returns

MSCI World Index Rebased to 100

Global Franchise MSCI World

0

50

100

150

200

250

300

350

400

450

´00 ´01 ´02 ´03 ´04 ´05 ´06 ´07 ´08 ´09 1́0 1́1 1́2 1́3 1́4 1́5 1́6$80

$280

$480

$680

$880

$1080

$1280

$1480

$1680

$2080

$1880

´96 ´98 ´00 ´02 ´04 ´06 ´08 1́0 1́2 1́4 03/18

Source: MSCI, Morgan Stanley Investment Management. Data as of 31 March 2018.Past performance is not a guarantee of future performance. The portfolio returns represent the Morgan Stanley Global Franchise Composite. The composite results shown are GROSS of investment advisory fees, are quoted in USD and include the reinvestment of dividends and income. The comparison index is the MSCI World Index with Net dividends reinvested. If fees had been applied returns would have been lower. The inception date of the Global Franchise Composite is March 31, 1996. The Global Franchise Strategy has the same principal investment objectives and will be managed according to the same fundamental strategy that is used in the GBEI Fund. However, there is no assurance that investments will be the same. Accordingly, the performance of the GBEI Fund is not, and may differ significantly from, the performance of the Global Franchise composite account and it should not be considered a substitute for such performance.

Source: FactSet. Data updated annually, as of 31 March 2017.Past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations. All performance data is calculated NAV to NAV, net of fees, and does not take account of commissions and costs incurred on the issue and redemption of units. The sources for all performance and Index data is Morgan Stanley Investment Management. The inception date of the Global Brands Fund is 30 October 2000.

3MS INVF GLOBAL BRANDS EQUITY INCOME FUND | MORGAN STANLEY INVESTMENT MANAGEMENT

Optimized Yield Enhancement

The MS INVF GBEI Fund generates income from a combination of dividends from high-quality stocks and the premiums from selling index call options, aiming to deliver a current yield of 4% per annum.

We sell short-term index calls on six liquid global indices, earning premiums. Selling index call options rather than options on underlying stocks allows us to retain the individual stock level exposure, in line with the portfolio of the proven Global Brands Fund.

The options strategy is uncollateralized. When our clients invest in the GBEI Fund, their capital is invested directly in the underlying equity portfolio and not posted to counterparties. This eliminates the potentially substantial “cash drag” that can be experienced by other income funds.

Our simulation of this approach demonstrates that the Fund achieves similar return and risk characteristics to the original Global Brands Fund over time, but offers an enhanced yield.

2Global Brands Equity Income Backtest vs Global Brands I shares(dividends reinvested, net of withholding tax and fees) vs. MSCI World – USD Amt ($)

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50

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3/06 12/153/07 3/08 3/143/113/09 3/10 3/12 3/13 3/15

GLOBAL BRANDS INCOME FUND – BACKTEST

GLOBAL BRANDS FUND

MSCI DAILY TR NET WORLD USD

Return 8.5% 8.3% 4.4%

Vol 14.2% 14.5% 16.5%

+ =c 2.0%*

DIVIDENDS FROM HIGH QUALITY STOCKS

c 4% p.a.TOTAL YIELD

c 2.0% EQUITY INDEX CALL OPTION PREMIUMS

The premiums received from the sale of index call options enhance the yield. This dynamic yet conservative options strategy is designed to help meet the yield target with confidence.For information purposes only, not to be construed as a recommendation to invest in or trade any securities or asset classes mentioned herein.

*2% post withholding tax.

Source: Morgan Stanley Investment Management, MSCI, Data for 10 year period from March 2006 to December 2015. Past performance is no indication of future performance. Morgan Stanley data used to determine option positions historically. Historical dividend yields determine historical overwriting sizes: strategy implementation uses expected yields. The backtest does not take account of seasonality of dividends, which we have since enhanced our model to include.The Global Brands Fund has the same principal investment objectives and will be managed according to the same fundamental strategy that is used in the GBEI Fund. However, there is no assurance that investments will be the same. Accordingly, the performance of the GBEI Fund is not, and may differ significantly from, the performance of the Global Brands Fund and it should not be considered a substitute for such performance.

4 MORGAN STANLEY INVESTMENT MANAGEMENT | MS INVF GLOBAL BRANDS EQUITY INCOME FUND

An Expert Investment Team

The Fund is managed by the International Equity team, the same team that manages the well-established Global Brands Fund. An experienced group of high conviction, bottom-up stock pickers, the team is headed by William Lock.

The systematic call option overwrite is driven by Morgan Stanley Investment Management’s (MSIM) Solutions & Multi Asset team, specialists in the implementation of option strategies.

Pioneers in high-quality investing, MSIM first launched the Global Franchise strategy in 1996 and the Global Brands Fund in 2000.

International Equity Team• Manages a concentrated portfolio of high quality companies

seeking to compound shareholder wealth, at superior rates of return, over the long-term. Agrees targets and approves distributions.

• Equity component of the Global Brands Equity Income portfolio in line with that of Global Brands.

• Team manages $18.1 billion in Franchise/Brands assets as of December 31, 2017.

Solutions & Multi Asset Team• Calculates required exposure

to option overwrite to achieve target income

• Quantitative/systematic approach

Specialists Focus on What They Do Best

3 Investment TeamMSIM’s MS INVF Global Brands Fund is renowned for investing in the world’s highest quality companies.

Global Brands 30 October 2000

INCEPTION DATE

10.47%NET EXCESS RETURNAs of 31 March 2018

(I share class of MS INVF Global Brands Fund, net of fees, since inception)

Past performance is not indicative of future performance.

15

WILLIAM LOCKManaging Director26 years of industry experience

BRUNO PAULSONManaging Director24 years of industry experience

DIRK HOFFMANN-BECKINGExecutive Director20 years of industry experience

Qualit

y Inc

ome

Capital Growth

A Measure Of Downside Protection

c 4% p.a.Yield Target

5MS INVF GLOBAL BRANDS EQUITY INCOME FUND | MORGAN STANLEY INVESTMENT MANAGEMENT

Income, The Right WayIndicative range provided for information only. Subject to change.

INDEX INFORMATIONThe MSCI World Net Index is a free float adjusted market capitalization weighted index that is designed to measure the global equity market performance of developed markets. The term “free float” represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The index is unmanaged and does not include any expenses, fees or sales charges. It is not possible to invest directly in an index.

DEFINITIONSDividend yield is the ratio between how much a company pays out in dividends each year relative to its share price. Free cash flow is cash flows (net income plus amortization and depreciation) minus capital expenditures and dividends. Return On Operating Capital Employed (ROOCE) is a profitability ratio indicating the efficiency of a company’s trade working capital, property and equipment. Calculated as: earnings before interest and taxes/property, plant and equipment plus trade working capital (exfinancials and excluding goodwill).

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12 Month Performance Periods to Latest Month End (%)MAR ’17 – MAR ’18

Global Brands Equity Income Fund - Class Z 8.63

MSCI World Net Index 13.59

© 2018 Morgan Stanley. All rights reserved. CRC: 1962008 Exp: 12/31/2018 9224514_CH_0418

Please visit msim.com/GBEI to learn more

The information contained in this communication is not a research recommendation or ‘investment research’ and is classified as a ‘Marketing Communication’ in accordance with the applicable European or Swiss regulation. This means that this marketing communication (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research (b) is not subject to any prohibition on dealing ahead of the dissemination of investment research.MSIM has not authorised financial intermediaries to use and to distribute this document, unless such use and distribution is made in accordance with applicable law and regulation. MSIM shall not be liable for, and accepts no liability for, the use or misuse of this document by any such financial intermediary. If you are a distributor of the Morgan Stanley Investment Funds, some or all of the funds or shares in individual funds may be available

for distribution. Please refer to your sub-distribution agreement for these details before forwarding fund information to your clients.The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without MSIM’s express written consent.All information contained herein is proprietary and is protected under copyright law.This document may be translated into other languages. Where such a translation is made this English version remains definitive. If there are any discrepancies between the English version and any version of this document in another language, the English version shall prevail.