MORGAN STANLEY CHARTER MSFCM LP - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2002 or

[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to__________________

Commission File Number 0-26282

MORGAN STANLEY CHARTER MSFCM L.P.

(Exact name of registrant as specified in its charter)

Delaware 13-3775071
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
c/o Managed Futures Department
825 Third Avenue, 8th Fl., New York, NY 10022
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (201) 209-8400

(Former name, former address, and former fiscal year, if changed
since last report)

Indicate by check-mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes X No___________

MORGAN STANLEY CHARTER MSFCM L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

June 30, 2002

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MORGAN STANLEY CHARTER MSFCM L.P.
STATEMENTS OF FINANCIAL CONDITION

MORGAN STANLEY CHARTER MSFCM L.P.
STATEMENTS OF OPERATIONS
(Unaudited)

-

MORGAN STANLEY CHARTER MSFCM L.P.
STATEMENTS OF OPERATIONS
(Unaudited)

MORGAN STANLEY CHARTER MSFCM L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Six Months Ended June 30, 2002 and 2001
(Unaudited)

MORGAN STANLEY CHARTER MSFCM L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)

MORGAN STANLEY CHARTER MSFCM L.P.
NOTES TO FINANCIAL STATEMENTS

June 30, 2002

(Unaudited)

The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Charter MSFCM, L.P. (the "Partnership"). The
financial statements and condensed notes herein should be read in
conjunction with the Partnership's December 31, 2001 Annual Report
on Form 10-K.

1. Organization
Morgan Stanley Charter MSFCM L.P. is a Delaware limited
partnership organized to engage primarily in the speculative
trading of futures contracts, options on futures contracts, and
forward contracts on physical commodities and other commodity
interests, including foreign currencies, financial instruments,
metals, energy and agricultural products. The Partnership is one
of the Morgan Stanley Charter Series of funds, comprised of the
Partnership, Morgan Stanley Charter Graham L.P., Morgan Stanley
Charter Millburn L.P., and Morgan Stanley Charter Welton L.P.

The general partner is Demeter Management Corporation ("Demeter").
The non-clearing commodity broker is Morgan Stanley DW Inc.

MORGAN STANLEY CHARTER MSFCM L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

("Morgan Stanley DW"). The clearing commodity brokers are Morgan
Stanley & Co. Inc. ("MS & Co.") and Morgan Stanley & Co.
International Limited ("MSIL"). Morgan Stanley Futures & Currency
Management Inc. ("MSFCM" or the "Trading Advisor") is the trading
advisor to the Partnership. Demeter, Morgan Stanley DW, MS & Co.,
MSIL, and MSFCM are wholly-owned subsidiaries of Morgan Stanley.

Effective June 20, 2002 Morgan Stanley Dean Witter & Co. changed
its name to Morgan Stanley.

2. Related Party Transactions
The Partnership's cash is on deposit with Morgan Stanley DW, MS &
Co. and MSIL in futures, forwards and options trading accounts to
meet margin requirements as needed. Morgan Stanley DW pays
interest on these funds based on a rate equal to that earned by
Morgan Stanley DW on its U.S. Treasury bill investments. The
Partnership pays brokerage fees to Morgan Stanley DW. Management
and incentive fees (if any) incurred by the Partnership are paid
to MSFCM.

3. Financial Instruments
The Partnership trades futures contracts, options on futures
contracts, and forward contracts on physical commodities and other

MORGAN STANLEY CHARTER MSFCM L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

commodity interests, including foreign currencies, financial
instruments, metals, energy and agricultural products. Futures
and forwards represent contracts for delayed delivery of an
instrument at a specified date and price. Risk arises from
changes in the value of these contracts and the potential
inability of counterparties to perform under the terms of the
contracts. There are numerous factors which may significantly
influence the market value of these contracts, including interest
rate volatility.

The market value of contracts is based on closing prices quoted by
the exchange, bank or clearing firm through which the contracts
are traded.

The Partnership's contracts are accounted for on a trade-date
basis and marked to market on a daily basis. The Partnership
accounts for its derivative investments in accordance with the
provisions of Statement of Financial Accounting Standard No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133"). SFAS No. 133 defines a derivative as a
financial instrument or other contract that has all three of the
following characteristics:

MORGAN STANLEY CHARTER MSFCM L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1) One or more underlying notional amounts or payment
provisions;
2) Requires no initial net investment or a smaller initial net
investment than would be required relative to changes in
market factors;
3) Terms require or permit net settlement.

Generally derivatives include futures, forward, swaps or options
contracts and other financial instruments with similar
characteristics such as caps, floors and collars.

The net unrealized gains (losses) on open contracts, reported as a
component of "Equity in futures interests trading accounts" on the
statements of financial condition, and their longest contract
maturities were as follows:

Net Unrealized Gains (Losses)
On Open Contracts Longest Maturities

Exchange- Off-Exchange- Exchange- Off-Exchange-
Date Traded Traded Total Traded Traded
$ $ $

Jun. 30, 2002 1,854,318 6,092,226 7,946,544 Mar. 2004 Sep. 2002
Dec. 31, 2001 (737,333) (364,132) (1,101,465) Jun. 2003 Apr. 2002

MORGAN STANLEY CHARTER MSFCM L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The Partnership has credit risk associated with counterparty non-
performance. The credit risk associated with the instruments in
which the Partnership is involved is limited to the amounts
reflected in the Partnership's statements of financial condition.

The Partnership also has credit risk because Morgan Stanley DW, MS
& Co. and MSIL act as the futures commission merchants or the
counterparties with respect to most of the Partnership's assets.
Exchange-traded futures and futures-styled options contracts are
marked to market on a daily basis, with variations in value
settled on a daily basis. Each of Morgan Stanley DW, MS & Co., and
MSIL, as a futures commission merchant for the Partnership's
exchange-traded futures and futures-styled options contracts, are
required, pursuant to regulations of the Commodity Futures Trading
Commission ("CFTC"), to segregate from their own assets, and for
the sole benefit of their commodity customers, all funds held by
them with respect to exchange-traded futures and futures-styled
options contracts, including an amount equal to the net unrealized
gains (losses) on all open futures and futures-styled options
contracts, which funds, in the aggregate, totaled $51,655,750 and
$42,535,750 at June 30, 2002 and December 31, 2001, respectively.
With respect to the Partnership's off-exchange-traded forward
currency contracts, there are no daily settlements of variations

MORGAN STANLEY CHARTER MSFCM L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
in value nor is there any requirement that an amount equal to the
net unrealized gains (losses) on open forward contracts be
segregated. With respect to those off-exchange-traded forward
currency contracts, the Partnership is at risk to the ability of
MS & Co., the sole counterparty on all of such contracts, to
perform. The Partnership has a netting agreement with MS & Co.
This agreement, which seeks to reduce both the Partnership's and
MS & Co.'s exposure on off-exchange-traded forward currency
contracts, should materially decrease the Partnership's credit
risk in the event of MS & Co.'s bankruptcy or insolvency.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Liquidity - The Partnership deposits its assets with Morgan
Stanley DW as non-clearing broker and MS & Co. and MSIL as
clearing brokers in separate futures, forwards, and options
trading accounts established for the Trading Advisor, which assets
are used as margin to engage in trading. The assets are held in
either non-interest bearing bank accounts or in securities and
instruments permitted by the CFTC for investment of customer
segregated or secured funds. The Partnership's assets held by the
commodity brokers may be used as margin solely for the
Partnership's trading. Since the Partnership's sole purpose is to
trade in futures, forwards and options, it is expected that the
Partnership will continue to own such liquid assets for margin
purposes.

The Partnership's investment in futures, forwards, and options
may, from time to time, be illiquid. Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as "daily price fluctuations limits" or "daily
limits". Trades may not be executed at prices beyond the daily
limit. If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be taken

nor liquidated unless traders are willing to effect trades at or
within the limit. Futures prices have occasionally moved the
daily limit for several consecutive days with little or no
trading. These market conditions could prevent the Partnership
from promptly liquidating its futures or options contracts and
result in restrictions on redemptions.

There is no limitation on daily price moves in trading forward
contracts on foreign currencies. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.

There are no material trends, events or uncertainties known at the
present time that will result in or that are reasonably likely to
result in the Partnership's liquidity increasing or decreasing in
any material way.

The Partnership has never had illiquidity affect a material
portion of its assets.

The Partnership has no off-balance sheet arrangements, nor
contractual obligations or commercial commitments to make future
payments that would affect the Partnership's liquidity or capital
resources. The contracts traded by the Partnership are accounted
for on a trade-date basis and marked to market on a daily basis.
The value of foreign currency forward contracts is based on the
spot rate as of the close of business, New York City time, on a
given day.

Capital Resources. The Partnership does not have, nor expect to
have, any capital assets. Redemptions, exchanges and sales of
additional units of limited partnership interest ("Unit(s)") in
the future will affect the amount of funds available for
investment in futures, forwards, and options in subsequent
periods. It is not possible to estimate the amount and therefore
the impact of future redemptions of Units.

There are no known material trends, favorable or unfavorable, nor
any expected material changes to the Partnership's capital
resource arrangements at the present time.

Results of Operations
General. The Partnership's results depend on the Trading Advisor
and the ability of the Trading Advisor's trading programs to take
advantage of price movements or other profit opportunities in the

futures, forwards and options markets. The following presents a
summary of the Partnership's operations for the three and six
month periods ended June 30, 2002 and 2001 and a general
discussion of its trading activities during each period. It is
important to note, however, that the Trading Advisor trades in
various markets at different times and that prior activity in a
particular market does not mean that such market will be actively
traded by the Trading Advisor or will be profitable in the future.
Consequently, the results of operations of the Partnership are
difficult to discuss other than in the context of the Trading
Advisor's trading activities on behalf of the Partnership and how
the Partnership has performed in the past.

The Partnership's results of operations are set forth in
financial statements prepared in accordance with United States
generally accepted accounting principles, which require the use
of certain accounting policies that affect the amounts reported
in these financial statements, including the following. The
contracts the Partnership trades are accounted for on a trade-
date basis and marked to market on a daily basis. The difference
between their cost and market value is recorded on the Statements
of Operations as "Net change in unrealized profit/loss" for open
(unrealized) contracts, and recorded as "Realized profit/loss"
when open positions are closed out, and the sum of these amounts

constitutes the Partnership's trading revenues. Earned interest
income revenue, as well as management fees, incentive fees and
brokerage fees expenses of the Partnership are recorded on an
accrual basis. Demeter believes that, based on the nature of the
operations of the Partnership, no assumptions other than those
presently used relating to the application of critical accounting
policies are reasonably plausible that could affect reported
amounts.

For the Quarter and Six Months Ended June 30, 2002
For the quarter ended June 30, 2002, the Partnership recorded
total trading revenues, including interest income, of $11,502,547
and posted an increase in net asset value per Unit. The most
significant gains of approximately 29.7% were recorded in the
currency markets primarily during May and June from previously
established long positions in the Japanese yen, Swiss franc, euro
and Swedish krona relative to the U.S. dollar as the value of
these currencies strengthened against the dollar amid falling
equity prices, concerns regarding corporate accounting integrity
and weak U.S. economic data. Significant currency gains were also
recorded from long positions in the euro relative to the British
pound. Additional gains of approximately 5.8% were recorded in
the global interest rate futures markets primarily during June
from long positions in Japanese and German interest rate futures

as prices trended higher following weakness in U.S. equity
markets, geopolitical concerns and uncertainty surrounding a
global economic recovery. A portion of the Partnership's gains
was offset by losses of approximately 7.5% recorded in the energy
markets primarily during May from previously established long
futures positions in crude oil and its related products as prices
moved lower on supply and demand concerns. Additional losses of
approximately 2.5% were recorded in the metals markets primarily
during April from short positions in aluminum futures as prices
climbed higher on sentiment that an improving U.S. economy would
boost demand. Total expenses for the three months ended June 30,
2002 were $2,162,364, resulting in net income of $9,340,183. The
net asset value of a Unit increased from $16.80 at March 31, 2002
to $20.18 at June 30, 2002.

For the six months ended June 30, 2002, the Partnership recorded
total trading revenues, including interest income, of $12,160,833
and posted an increase in net asset value per Unit. The most
significant gains of approximately 19.1% were recorded in the
currency markets primarily during May and June from previously
established long positions in the Japanese yen, Swiss franc, euro
and Swedish krona relative to the U.S. dollar as the value of
these currencies strengthened against the dollar amid falling
equity prices, concerns regarding corporate accounting integrity

and weak U.S. economic data. Significant currency gains were also
recorded from long positions in the euro relative to the British
pound. Additional gains of approximately 5.4% were recorded in
the global interest rate futures markets primarily during June
from long positions in Japanese and German interest rate futures
as prices trended higher following weakness in U.S. equity
markets, geopolitical concerns and uncertainty surrounding a
global economic recovery. Gains of approximately 2.1% were
recorded in the energy markets primarily during March from
previously established long positions in crude oil futures as
prices trended higher amid escalating Middle East tensions and
supply and demand factors. A portion of the Partnership's gains
was offset by losses of approximately 2.9% recorded in the metals
markets primarily during April from short positions in aluminum
futures as prices climbed higher on sentiment that an improving
U.S. economy would boost demand. Total expenses for the six
months ended June 30, 2002 were $3,136,804, resulting in net
income of $9,024,029. The net asset value of a Unit increased
from $16.92 at December 31, 2001 to $20.18 at June 30, 2002.

For the Quarter and Six Months Ended June 30, 2001
For the quarter ended June 30, 2001, the Partnership recorded
total trading losses, net of interest income, of $817,393 and
posted a decrease in net asset value per Unit. The most

significant losses of approximately 2.8% were experienced
primarily during June in the global interest rate futures markets
from short U.S. and German interest rate futures positions as
prices jumped higher on weaker than expected U.S. and European
economic data that set the stage for possible interest rate cuts.
In the global stock index futures markets, losses of
approximately 2.1% were recorded primarily during late May and
June from long positions in S&P 500 Index futures as global stock
prices declined on worries that the U.S. economic slowdown will
ignite a global downturn and that corporate earnings will suffer.
In the metals markets, losses of approximately 2.1% were incurred
primarily during April from short aluminum futures positions as
prices rose on technically-based buying and production concerns.
In the currency markets, losses of approximately 0.1% were
recorded primarily during April and May from short positions in
the Japanese yen as the value of the yen reversed higher versus
the U.S. dollar following a surprise interest rate cut by the
U.S. Federal Reserve and on optimism that the Japanese government
would unveil an emergency package to stimulate that country's
ailing economy. Offsetting currency gains were recorded during
May from short positions in the euro as its value weakened
relative to the British pound amid pessimism about European
growth prospects. These losses were partially offset by gains of
approximately 3.9% recorded in the energy markets primarily
during May and June from short natural gas futures positions as

prices declined as the American Gas Association reported growing
inventories and the lack of demand throughout most of the U.S.
Total expenses for the three months ended June 30, 2001 were
$858,799, resulting in a net loss of $1,676,192. The net asset
value of a Unit decreased from $18.01 at March 31, 2001 to $17.24
at June 30, 2001.

For the six months ended June 30, 2001, the Partnership recorded
total trading revenues, including interest income, of $1,284,335
and, after expenses, posted a decrease in net asset value per
Unit. The most significant losses of approximately 3.2% were
recorded in the energy markets throughout the first six months of
the year from crude oil futures and its related products as a
result of volatility in oil prices due to a continually changing
outlook for supply, production and demand. In the metals
markets, losses of approximately 3.0% were recorded primarily
during February from long positions in aluminum futures as prices
moved lower, pressured by the decline in the U.S. equity market
and the subsequent concerns over demand. Additional losses were
incurred during April from short aluminum futures positions as
prices rose on technically-based buying and production concerns.
In the global stock index futures markets, losses of
approximately 1.5% were recorded primarily during late May and
June from long positions in S&P 500 Index futures as global stock
prices declined on worries that the U.S. economic slowdown will

ignite a global downturn. These losses were partially offset by
gains of approximately 6.7% recorded throughout a majority of the
first quarter in the global interest rate futures markets from
long positions in Japanese government bond futures as prices
moved higher on concerns regarding that country's economy.
Additional gains were recorded from short positions in Australian
interest rate futures as prices moved lower. In the currency
markets, gains of approximately 2.2% were recorded during May
from short positions in the euro as its value weakened relative
to the British pound amid pessimism about European economic
growth prospects. Total expenses for the six months ended June
30, 2001 were $1,832,195, resulting in a net loss of $547,860.
The net asset value of a Unit decreased from $17.50 at December
31, 2000 to $17.24 at June 30, 2001.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Introduction
The Partnership is a commodity pool engaged primarily in the
speculative trading of futures, forwards, and options. The
market-sensitive instruments held by the Partnership are acquired
for speculative trading purposes only and, as a result, all or
substantially all of the Partnership's assets are at risk of
trading loss. Unlike an operating company, the risk of market-
sensitive instruments is central, not incidental, to the
Partnership's main business activities.

The futures, forwards and options traded by the Partnership
involve varying degrees of related market risk. Market risk is
often dependent upon changes in the level or volatility of
interest rates, exchange rates, and prices of financial
instruments and commodities. Fluctuations in market risk based
upon these factors result in frequent changes in the fair value
of the Partnership's open positions, and, consequently, in its
earnings and cash flow.

The Partnership's total market risk is influenced by a wide
variety of factors, including the diversification among the
Partnership's open positions, the volatility present within the
markets, and the liquidity of the markets. At different times,

each of these factors may act to increase or decrease the market
risk associated with the Partnership.

The Partnership's past performance is not necessarily indicative
of its future results. Any attempt to numerically quantify the
Partnership's market risk is limited by the uncertainty of its
speculative trading. The Partnership's speculative trading may
cause future losses and volatility (i.e., "risk of ruin") that
far exceed the Partnership's experience to date or any reasonable
expectations based upon historical changes in market value.

Quantifying the Partnership's Trading Value at Risk
The following quantitative disclosures regarding the Partnership's
market risk exposures contain "forward-looking statements" within
the meaning of the safe harbor from civil liability provided for
such statements by the Private Securities Litigation Reform Act of
1995 (set forth in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934). All
quantitative disclosures in this section are deemed to be forward-
looking statements for purposes of the safe harbor, except for
statements of historical fact.

The Partnership accounts for open positions on the basis of mark-
to-market accounting principles. Any loss in the market value of
the Partnership's open positions is directly reflected in the

Partnership's earnings, whether realized or unrealized, and its
cash flow. Profits and losses on open positions of exchange-
traded futures, forwards and options are settled daily through
variation margin.

The Partnership's risk exposure in the market sectors traded by
the Trading Advisor is estimated below in terms of Value at Risk
("VaR"). The VaR model used by the Partnership includes many
variables that could change the market value of the Partnership's
trading portfolio. The Partnership estimates VaR using a model
based upon historical simulation with a confidence level of 99%.
Historical simulation involves constructing a distribution of
hypothetical daily changes in the value of a trading portfolio.
The VaR model takes into account linear exposures to price and
interest rate risk. Market risks that are incorporated in the
VaR model include equity and commodity prices, interest rates,
foreign exchange rates, and correlation among these variables.
The hypothetical changes in portfolio value are based on daily
percentage changes observed in key market indices or other market
factors ("market risk factors") to which the portfolio is
sensitive. The historical observation period of the Partner-
ship's VaR is approximately four years. The one-day 99%
confidence level of the Partnership's VaR corresponds to the
negative change in portfolio value that, based on observed market

risk factors, would have been exceeded once in 100 trading days.
In other words, one-day VaR for a portfolio is a number such that
losses in this portfolio are estimated to exceed the VaR only one
day in 100.

VaR is calculated using historical simulation. Demeter uses
approximately four years of daily market data (1,000
observations) and revalues its portfolio (using delta-gamma
approximations) for each of the historical market moves that
occurred over this time period. This generates a probability
distribution of daily 'simulated profit and loss' outcomes. The
VaR is the appropriate percentile of this distribution. For
example, the 99% one-day VaR would represent the 10th worst
outcome from Demeter's simulated profit and loss series.

VaR models, including the Partnership's, are continuously
evolving as trading portfolios become more diverse and modeling
techniques and systems capabilities improve. Please note that
the VaR model is used to numerically quantify market risk for
historic reporting purposes only and is not utilized by either
Demeter or the Trading Advisor in their daily risk management
activities. Please further note that VaR as described above may
not be comparable to similarly titled measures used by other
entities.

The Partnership's Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership's open positions as a percentage of total net assets
by primary market risk category at June 30, 2002 and 2001. At
June 30, 2002 and 2001, the Partnership's total capitalization
was approximately $58 million and $39 million, respectively.

Primary Market June 30, 2002 June 30, 2001
Risk Category Value at Risk Value at Risk

Interest Rate (3.24)% (1.14)%
Currency (2.91) (2.33)
Equity (0.16) (0.08)
Commodity (0.75) (2.19)
Aggregate Value at Risk (4.30)% (3.17)%

The VaR for a market category represents the one-day downside
risk for the aggregate exposures associated with this market
category. The aggregate VaR, listed above for the Partnership,
represents the aggregate VaR of the Partnership's open positions
across all the market categories, and is less than the sum of the
VaR(s) for all such market categories due to the diversification
benefit across asset classes.

The table above represents the VaR of the Partnership's open
positions at June 30, 2002 and 2001 only and is not necessarily
representative of either the historic or future risk of an

investment in the Partnership. Because the Partnership's only
business is the speculative trading of futures, forwards and
options, the composition of its trading portfolio can change
significantly over any given time period, or even within a single
trading day. Any changes in open positions could positively or
negatively materially impact market risk as measured by VaR.

The table below supplements the quarter-end VaR by presenting the
Partnership's high, low and average VaR, as a percentage of total
net assets for the four quarterly reporting periods from July 1,
2001 through June 30, 2002.

Primary Market Risk Category High Low Average
Interest Rate (3.24)% (1.07)% (2.10)%

Currency (2.91) (1.71) (2.48)

Equity (0.19) - (0.11)

Commodity (2.58) (0.75) (1.29)

Aggregate Value at Risk (4.30)% (2.59)% (3.55)%

Limitations on Value at Risk as an Assessment of Market Risk
The face value of the market sector instruments held by the
Partnership is typically many times the applicable margin
requirements. Margin requirements generally range between 2% and
15% of contract face value. Additionally, the use of leverage
causes the face value of the market sector instruments held by the

Partnership to typically be many times the total capitalization of
the Partnership. The value of the Partnership's open positions
thus creates a "risk of ruin" not typically found in other
investments. The relative size of the positions held may cause
the Partnership to incur losses greatly in excess of VaR within a
short period of time, given the effects of the leverage employed
and market volatility. The VaR tables above, as well as the past
performance of the Partnership, give no indication of such "risk
of ruin". In addition, VaR risk measures should be viewed in light
of the methodology's limitations, which include the following:
? past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
? changes in portfolio value caused by market movements may
differ from those of the VaR model;
? VaR results reflect past trading positions while future risk
depends on future positions;
? VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
? the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

The VaR tables above present the results of the Partnership's VaR
for each of the Partnership's market risk exposures and on an
aggregate basis at June 30, 2002 and 2001, and for the end of the
four quarterly reporting periods from July 1, 2001 through June
30, 2002. Since VaR is based on historical data, VaR should not
be viewed as predictive of the Partnership's future financial
performance or its ability to manage or monitor risk. There can
be no assurance that the Partnership's actual losses on a
particular day will not exceed the VaR amounts indicated above or
that such losses will not occur more than once in 100 trading
days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances not needed for margin. These balances and any market
risk they may represent are immaterial.

At June 30, 2002, the Partnership's cash balance at Morgan Stanley
DW was approximately 76% of its total net asset value. A decline
in short-term interest rates will result in a decline in the
Partnership's cash management income. This cash flow risk is not
considered to be material.

Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses, taking into account the leverage,
optionality and multiplier features of the Partnership's market-
sensitive instruments, in relation to the Partnership's net
assets.

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership's
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures - constitute
forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act.
The Partnership's primary market risk exposures as well as the
strategies used and to be used by Demeter and the Trading Advisor
for managing such exposures are subject to numerous uncertainties,
contingencies and risks, any one of which could cause the actual
results of the Partnership's risk controls to differ materially
from the objectives of such strategies. Government interventions,
defaults and expropriations, illiquid markets, the emergence of
dominant fundamental factors, political upheavals, changes in
historical price relationships, an influx of new market
participants, increased regulation and many other factors could

result in material losses as well as in material changes to the
risk exposures and the risk management strategies of the
Partnership. Investors must be prepared to lose all or
substantially all of their investment in the Partnership.

The following were the primary trading risk exposures of the
Partnership at June 30, 2002, by market sector. It may be
anticipated however, that these market exposures will vary
materially over time.

Interest Rate. The primary market exposure of the Partnership at
June 30, 2002 was to the interest rate sector. Exposure was
primarily spread across the Japanese and German interest rate
sectors. Interest rate movements directly affect the price of
the sovereign bond futures positions held by the Partnership and
indirectly affect the value of its stock index and currency
positions. Interest rate movements in one country as well as
relative interest rate movements between countries materially
impact the Partnership's profitability. The Partnership's
primary interest rate exposure is generally to interest rate
fluctuations in the U.S. and the other G-7 countries. The G-7
countries consist of France, the U.S., Britain, Germany, Japan,
Italy, and Canada. However, the Partnership also takes futures
positions in the government debt of smaller nations - e.g.,
Australia. Demeter anticipates that G-7 and Australian interest

rates will remain the primary interest rate exposure of the
Partnership for the foreseeable future. The speculative futures
positions held by the Partnership may range from short to long-
term instruments. Consequently, changes in short, medium or
long-term interest rates may have an effect on the Partnership.

Currency. The second largest market exposure of the Partnership
at June 30, 2002 was to the currency sector. The Partnership's
currency exposure is to exchange rate fluctuations, primarily
fluctuations which disrupt the historical pricing relationships
between different currencies and currency pairs. Interest rate
changes as well as political and general economic conditions
influence these fluctuations. The Partnership trades a large
number of currencies, including cross-rates - i.e., positions
between two currencies other than the U.S. dollar. At June 30,
2002, the Partnership's major exposures were to euro currency
crosses and outright U.S. dollar positions. Outright positions
consist of the U.S. dollar vs. other currencies. These other
currencies include major and minor currencies. Demeter does not
anticipate that the risk profile of the Partnership's currency
sector will change significantly in the future. The currency
trading VaR figure includes foreign margin amounts converted into
U.S. dollars with an incremental adjustment to reflect the
exchange rate risk inherent to the U.S.-based Partnership in
expressing VaR in a functional currency other than U.S. dollars.

Equity. At June 30, 2002, the equity exposure was to equity
price risk in the G-7 countries. The stock index futures traded
by the Partnership are by law limited to futures on broadly-based
indices. At June 30, 2002, the Partnership's primary exposure
was the S&P 500 stock index. The Partnership is primarily
exposed to the risk of adverse price trends or static markets in
the U.S. and Japanese indices. Static markets would not cause
major market changes but would make it difficult for the
Partnership to avoid being "whipsawed" into numerous small
losses.

Commodity.
Metals. The Partnership's metals exposure at June 30, 2002
was to fluctuations in the price of precious metals, such as
gold, and base metals, such as copper and nickel. Economic
forces, supply and demand inequalities, geopolitical factors
and market expectations influence price movements in these
markets. The Trading Advisor has, from time to time, taken
positions when market opportunities develop. Demeter
anticipates that the Partnership will continue to be exposed
to the precious and base metals markets.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at June 30, 2002:

Foreign Currency Balances. The Partnership's primary
foreign currency balance at June 30, 2002 was Japanese yen.
The Partnership controls the non-trading risk of these
balances by regularly converting them back into U.S. dollars
upon liquidation of their respective positions.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Advisor, separately, attempt to
manage the risk of the Partnership's open positions in essentially
the same manner in all market categories traded. Demeter attempts
to manage market exposure by diversifying the Partnership's assets
among different market sectors and trading approaches, and
monitoring the performance of the Trading Advisor daily. In
addition, the Trading Advisor establishes diversification
guidelines, often set in terms of the maximum margin to be
committed to positions in any one market sector or market-
sensitive instrument.

Demeter monitors and controls the risk of the Partnership's non-
trading instrument, cash. Cash is the only Partnership
investment directed by Demeter, rather than the Trading Advisor.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS
None.

Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(d) Use of Proceeds
The Partnership initially registered 100,000 Units in its initial
offering of March 3, 1994 and subsequent supplemental offerings.
Through December 31, 1994, 66,708.624 Units were sold, leaving
33,291.376 Units unsold, which were ultimately de-registered. The
aggregate price of the Units sold through December 31, 1994 was
$67,394,951.

On December 1, 2000, the Partnership converted each outstanding
Unit into 100 Units as it became one of the Charter Series of
funds. The Partnership registered an additional 1,750,000 Units
pursuant to a new Registration Statement on Form S-1 (SEC File
Number 333-41684) which became effective on October 11, 2000.

The managing underwriter for the Partnership is Morgan Stanley DW.

Units are sold continuously at monthly closings at a price equal
to 100% of the net asset value per Unit as of the close of
business on the last day of each month.

Through June 30, 2002, 7,796,715.426 Units were sold, leaving
624,146.974 Units unsold at June 30, 2002. The aggregate price of
the Units sold through June 30, 2002 was $87,120,571.

Since no expenses are chargeable against proceeds, 100% of the
proceeds of the offering have been applied to the working capital
of the Partnership for use in accordance with the "Use of
Proceeds" section of the prospectus included as part of the above
referenced Registration Statement.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) Exhibits

3.01 Form of Amended and Restated Limited Partnership
Agreement of the Partnership, dated as of October 31,
2000, is incorporated by reference to Exhibit A of the
Partnership's Prospectus, dated July 29, 2002, filed with
the Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933, as amended,
on August 12, 2002.
3.02 Certificate of Limited Partnership, dated March 1, 1994,
is incorporated by reference to Exhibit 3.02 of the
Partnership's Registration Statement on Form S-1 (File
No. 33-71654) filed with the Securities and Exchange
Commission on November 12, 1993.
3.03 Certificate of Amendment of Certificate of Limited
Partnership, dated October 11, 2000, is incorporated by
reference to Exhibit 3.03 of the Partnership's Post-
Effective Amendment No. 1 to the Registration Statement
on Form S-1 (File No. 333-41684) filed with the
Securities and Exchange Commission on March 30, 2001.
3.04 Certificate of Amendment of Certificate of Limited
Partnership, dated November 1, 2001, (changing its name
from Morgan Stanley Dean Witter Charter DWFCM L.P.) is
incorporated by reference to Exhibit 3.01 of the
Partnership's Form 8-K (File No. 0-26282) filed with the
Securities and Exchange Commission on November 6, 2001.

10.01 Amended and Restated Management Agreement among the
Partnership, Demeter and MSFCM, dated as of December 1,
2000 incorporated by reference to Exhibit 10.01 of the
Partnership's Form 10-K (File No. 0-26282) for fiscal
year ended December 31, 2001, filed on March 28, 2002.
10.02 Form of Subscription and Exchange Agreement and Power of
Attorney to be executed by each purchaser of Units is
incorporated by reference to Exhibit B of the
Partnership's Prospectus dated July 29, 2002, filed with
the Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933, as amended,
on August 12, 2002.
10.03 Amended and Restated Customer Agreement between the
Partnership and Morgan Stanley DW, dated as of May 19,
2000, is incorporated by reference to Exhibit 10.01 of
the Partnership's Form 8-K (File No. 0-26282) filed with
the Securities and Exchange Commission on November 6,
2001.
10.04 Commodity Futures Customer Agreement between MS & Co. and
the Partnership, and acknowledged and agreed to by Morgan
Stanley DW, dated as of May 1, 2000, is incorporated by
reference to Exhibit 10.02 of the Partnership's Form 8-K
(File No. 0-26282) filed with the Securities and Exchange
Commission on November 6, 2001.
10.05 Customer Agreement between the Partnership and MSIL,
dated as of May 1, 2000, is incorporated by reference to
Exhibit 10.04 of the Partnership's Form 8-K (File No. 0-
26282) filed with the Securities and Exchange Commission
on November 6, 2001.
10.06 Foreign Exchange and Options Master Agreement between MS
& Co. and the Partnership, dated as of August 30, 1999,
is incorporated by reference to Exhibit 10.05 of the
Partnership's Form 8-K (File No. 0-26282) filed with the
Securities and Exchange Commission on November 6, 2001.
10.07 Amended and Restated Escrow Agreement, dated as of
October 11, 2000, among the Partnership, Morgan Stanley
Charter Graham L.P., Morgan Stanley Charter Millburn
L.P., Morgan Stanley Charter Welton L.P., Morgan Stanley
DW, and The Chase Manhattan Bank is incorporated by
reference to Exhibit 10.10 of the Partnership's Post-
Effective Amendment No. 1 to the Registration Statement
on Form S-1 (File No. 333-41684) filed with the
Securities and Exchange Commission on March 30, 2001.

10.08 Form of Subscription Agreement Update Form is
incorporated by reference to Exhibit C of the
Partnership's Prospectus dated July 29, 2002, filed with
the Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933, as amended,
on August 12, 2002.
10.09 Securities Account Control Agreement among the
Partnership, MS & Co., and Morgan Stanley DW, dated as of
May 1, 2000, is incorporated by reference to Exhibit
10.03 of the Partnership's Form 8-K (File No. 0-26282)
filed with the Securities and Exchange Commission on
November 6, 2001.
99.01 Certification of Periodic Financial Reports.

(B) Reports on Form 8-K. - None.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Charter MSFCM L.P.
(Registrant)

By: Demeter Management Corporation
(General Partner)

August 12, 2002 By: /s/ Raymond E. Koch
Raymond E. Koch
Chief Financial Officer

The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley Charter
MSFCM L.P. (the "Partnership") on Form 10-Q for the period ended
June 30, 2002, as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Robert E. Murray,
President, Demeter Management Corporation, general partner of the
Partnership, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Partnership.

By: /s/ Robert E. Murray

Name: Robert E. Murray
Title: Chairman of the Board and President

Date: August 12, 2002

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley Charter
MSFCM L.P. (the "Partnership") on Form 10-Q for the period ended
June 30, 2002, as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Raymond E. Koch,
Chief Financial Officer, Demeter Management Corporation, general
partner of the Partnership, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Partnership.

By: /s/ Raymond E. Koch

Name: Raymond E. Koch
Title: Chief Financial Officer

Date: August 12, 2002