MORGAN STANLEY CHARTER GRAHAM LP/ - 10-K Annual Report

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

FORM 10-K

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the year ended December 31, 2003 or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from ________________to___________________

Commission File Number 0-25603

MORGAN STANLEY CHARTER GRAHAM L.P.

(Exact name of registrant as specified in its Limited Partnership Agreement)

DELAWARE 13-4018068
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
825 Third Avenue, 9th Floor
New York, NY 10022
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (212) 310-6444

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered

None None

Securities registered pursuant to Section 12(g) of the Act:

Units of Limited Partnership Interest

(Title of Class)

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 _____

Indicate by check-mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment of this Form 10-K. [X]

Indicate by check-mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes No X

State the aggregate market value of the Units of Limited Partnership Interest
held by non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which Units were sold as of the last
business day of the registrant's most recently completed second fiscal quarter:
$189,380,471 at June 30, 2003.

DOCUMENTS INCORPORATED BY REFERENCE
(See Page 1)

MORGAN STANLEY CHARTER GRAHAM L.P.
INDEX TO ANNUAL REPORT ON FORM 10-K
DECEMBER 31, 2003

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference
as follows:

Documents Incorporated Part of Form 10-K

Partnership's Prospectus dated
February 26, 2003 I

Partnership's Supplement to the
Prospectus dated November 7, 2003 I

Annual Report to Morgan Stanley
Charter Series Limited Partners
for the year ended December 31, 2003 II, III and IV

PART I
Item 1. BUSINESS
(a) General Development of Business. Morgan Stanley Charter Graham
L.P. ("the Partnership") 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, but not limited to, foreign currencies, financial
instruments, metals, energy and agricultural products. The
Partnership commenced operations on March 1, 1999. The
Partnership is one of the Morgan Stanley Charter series of funds,
comprised of the Partnership, Morgan Stanley Charter Campbell
L.P., Morgan Stanley Charter Millburn L.P., and Morgan Stanley
Charter MSFCM L.P.

The Partnership's general partner is Demeter Management
Corporation ("Demeter"). The non-clearing commodity broker is
Morgan Stanley DW Inc. ("Morgan Stanley DW"). The clearing
commodity brokers are Morgan Stanley & Co. Incorporated ("MS &
Co.") and Morgan Stanley & Co. International Limited ("MSIL").
Demeter, Morgan Stanley DW, MS & Co. and MSIL are wholly-owned
subsidiaries of Morgan Stanley. Graham Capital Management, L.P.
(the "Trading Advisor") is the trading advisor to the Partnership.

Units of limited partnership interest ("Unit(s)") are sold at
monthly closings at a purchase price equal to 100% of the net
asset value per Unit as of the close of business on the
last day of each month.

The managing underwriter for the Partnership is Morgan Stanley DW.

The Partnership's net asset value per Unit at December 31, 2003
was $21.88, representing an increase of 16.14 percent from the net
asset value per Unit of $18.84 at December 31, 2002. For a more
detailed description of the Partnership's business, see
subparagraph (c).

(b) Financial Information about Segments. For financial informa-
tion reporting purposes the Partnership is deemed to engage in
one industry segment, the speculative trading of futures, forwards
and options. The relevant financial information is presented in
Items 6 and 8.

(c) Narrative Description of Business. The Partnership is in the
business of speculative trading of futures, forwards, and options
pursuant to trading instructions provided by the Trading Advisor.
For a detailed description of the different facets of the
Partnership's business, see those portions of the Partnership's
prospectus, dated February 26, 2003 (the "Prospectus") and the
Partnership's supplement to the Prospectus dated November 7, 2003
(the "Supplement"), incorporated by reference in this Form 10-K,
set forth below.
Facets of Business

1. Summary 1. "Summary" (Pages 1-9 of
the Prospectus and Pages
S-1 - S-2 of the Supple-
ment).

2. Futures, Options, and 2. "The Futures, Options, and
Forwards Markets Forwards Markets" (Pages
108-112 of the Prospectus).

3. Partnership's Trading 3. "Use of Proceeds" (Pages
Arrangements and 24-26 of the Prospectus).
Policies "The Trading Advisors"
(Pages 61-85 of the
Prospectus and Pages S-25 -
S-32 of the Supplement).

4. Management of the Part- 4. "Management Agreements"
nership (Page 61 of the Pros-
pectus). "The General
Partner" (Pages 55-60 of
the Prospectus and Pages
S-22 - S-24 of the Supple-
ment). "The Commodity
Brokers" (Pages 87-89
of the Prospectus) and
"The Limited Partner-
ship Agreements" (Pages
90-93 of the Prospectus).

5. Taxation of the Partner- 5. "Material Federal Income
ship's Limited Partners Tax Considerations" and
"State and Local Income Tax
Aspects" (Pages 99-106
of the Prospectus).

(d) Financial Information about Geographic Areas. The Partnership
has not engaged in any operations in foreign countries; however,
the Partnership (through the commodity brokers) enters into
forward contract transactions where foreign banks are the
contracting party and trades futures, forwards, and options on
foreign exchanges.

(e) Available Information. The Partnership files annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and all amendments to these reports with the Securities
and Exchange Commission ("SEC"). You may read and copy any
document filed by the Partnership at the SEC's public reference
room at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for information on
the public reference room. The Partnership does not maintain an
internet website, however, the SEC maintains a website that
contains annual, quarterly, and current reports, proxy statements
and other information that issuers (including the Partnership)
file electronically with the SEC. The SEC's website address is
http://www.sec.gov.

Item 2. PROPERTIES
The Partnership's executive and administrative offices are located
within the offices of Morgan Stanley DW. The Morgan Stanley DW
offices utilized by the Partnership are located at 825 Third
Avenue, 9th Floor, New York, NY 10022.

Item 3. LEGAL PROCEEDINGS
None.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
Item 5.MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND RELATED
SECURITY HOLDER MATTERS

(a) Market Information. There is no established public trading
market for Units of the Partnership.

(b) Holders. The number of holders of Units at December 31, 2003
was approximately 8,629.

(c) Distributions. No distributions have been made by the
Partnership since it commenced trading operations on March 1,
1999. Demeter has sole discretion to decide what distributions, if
any, shall be made to investors in the Partnership. Demeter
currently does not intend to make any distributions of Partnership
profits.

(d) Securities Sold; Consideration. Units are continuously sold
at monthly closings at a purchase 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 December 31, 2003, 14,565,057.482 Units were sold, leaving
5,434,942.518 Units unsold. The aggregate price of the Units sold
through December 31, 2003 was $243,637,197.

(e) Underwriter. The managing underwriter for the
Partnership is Morgan Stanley DW.

(f) Use of Proceeds. The Partnership initially registered
3,000,000 Units pursuant to a Registration Statement on Form S-1,
which became effective on November 6, 1998 (SEC File Number 333-
60115).

The Partnership registered an additional 6,000,000 Units pursuant
to a new Registration Statement on Form S-1, which became
effective on March 27, 2000 (SEC File Number 333-91563).

The Partnership registered an additional 2,000,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on July 29, 2002 (SEC File Number 333-85076).

The Partnership registered an additional 9,000,000 Units pursuant
to a Registration Statement on Form S-1, which became effective on
February 26, 2003 (SEC File Number 333-103166).

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 Statements.

Item 6. SELECTED FINANCIAL DATA (in dollars)

Item 7. 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 and may be used as margin
solely for the Partnership's trading. The assets are held in
either non-interest bearing bank accounts or in securities and
instruments permitted by the Commodity Futures Trading Commission
for investment of customer segregated or secured funds. 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. Illiquidity has not
materially affected the Partnership's assets.

There are no known material trends, demands, commitments, events
or uncertainties 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.

Capital Resources. The Partnership does not have, nor expect to
have, any capital assets. Redemptions, exchanges and sales of
additional Units 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, that would affect, nor any expected material changes
to, the Partnership's capital resource arrangements at the present
time. The Partnership does not have any off-balance sheet
arrangements, nor does it have contractual obligations or
commercial commitments to make future payments that would affect
its liquidity or capital resources.

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 each of the three
years in the period ended December 31, 2003 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. Past performance is
not necessarily indicative of future results.

The Partnership's results of operations are set forth in
its financial statements prepared in accordance with accounting
principles generally accepted in the United States of America,
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. The
market value of a futures contract is the settlement price on the
exchange on which that futures contract is traded on a particular
day. 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. 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 relating to the application of
critical accounting policies other than those presently used could
reasonably affect reported amounts.

The Partnership recorded revenues including interest
totaling $47,428,993 and expenses totaling $20,183,755, resulting
in net income of $27,245,238 for the year ended December 31,
2003. The Partnership's net asset value per Unit increased from
$18.84 at December 31, 2002 to $21.88 at December 31, 2003. Total
redemptions and subscriptions for the year were $17,908,245 and
$144,976,579, respectively, and the Partnership's ending capital
was $270,709,792 at December 31, 2003, an increase of $154,313,572
from ending capital at December 31, 2002 of $116,396,220.

The most significant trading gains of approximately 17.0% in the
currency markets were produced from long positions in the
Australian dollar, Canadian dollar, South African rand, and New
Zealand dollar versus the U.S. dollar during a majority of the
year as the value of the "commodity currencies" increased sharply
versus the U.S. dollar on the heels of higher commodity prices
and a significant interest rate differential between these
countries and the U.S. Additional gains resulted from long
positions in the euro, Japanese yen, and Swiss franc versus the
U.S. dollar as the value of the U.S. dollar declined throughout
much of the year due to geopolitical uncertainty and negative
economic data. Additional gains were recorded from long cross-
rate positions in the euro versus the British pound and Japanese
yen. In the global stock index futures markets, gains of
approximately 13.9% were experienced from long positions in U.S.,
Pacific Rim, and European stock index futures as global equity
prices moved higher during the latter half of the year due to
continued optimism regarding a global economic recovery.
Additional gains of approximately 3.2% were recorded in the
metals markets primarily during the fourth quarter from long
positions in copper, nickel, and zinc as base metal prices
rallied in response to growing investor sentiment that the global
economy was on the path to recovery and amid increased demand,
especially from China. Smaller gains of approximately 1.2% were
recorded in the energy markets, primarily during January and
February from long positions in natural gas futures as prices
jumped sharply higher amid fears that extremely cold weather in
the U.S. northeast and midwest could further deplete already
diminished supplies. Additional gains were recorded from long
positions in crude oil futures as prices continued to trend
higher during those months amid the increasing likelihood of
military action against Iraq. A portion of the Partnership's
overall gains for year was offset by losses of approximately 5.0%
in the global interest rate markets primarily during the third
quarter from positions in U.S., European, and Japanese interest
rate futures as prices first declined during July amid rising
interest rates and a rally in global equities. Prices then
reversed higher during August and September as renewed fears for
an unsustainable economic recovery resurfaced. Smaller losses of
approximately 1.2% were recorded in the agricultural markets from
short positions in wheat and corn futures during early May as
prices moved higher amid concerns of weather related crop damage
in the U.S. midwest.

The Partnership recorded revenues including interest
totaling $34,435,014 and expenses totaling $9,807,996, resulting
in net income of $24,627,018 for the year ended December 31,
2002. The Partnership's net asset value per Unit increased from
$13.77 at December 31, 2001 to $18.84 at December 31, 2002. Total
redemptions and subscriptions for the year were $8,867,415 and
$52,695,849, respectively, and the Partnership's ending capital
was $116,396,220 at December 31, 2002, an increase of $68,455,452
from ending capital at December 31, 2001 of $47,940,768.

The most significant trading gains of approximately 23.4% were
recorded in the global interest rate futures markets from long
positions in European and U.S. interest rate futures as prices
trended higher during the period from June through September, as
well as in December, drawing strong support from falling equity
prices, increased economic uncertainty, and global tensions.
Additional gains of approximately 21.3% were recorded in the
currency markets from long positions in the euro and Swiss franc
versus the U.S. dollar as the value of the dollar weakened during
May, June, and December, prompted by pessimism regarding a U.S.
economic recovery and increased global tensions concerning India,
Pakistan, Iraq, and North Korea. Smaller gains of approximately
6.6% were recorded in the agricultural futures markets from long
positions in corn and wheat futures as prices trended higher
during the third quarter amid fears that continued hot-dry
weather would have an adverse affect on crops in the U.S midwest.
In the global stock index futures markets, gains of
approximately 6.1% were recorded from short positions in U.S. and
European stock index futures, primarily in July and September, as
prices moved lower amid suspicions regarding corporate accounting
practices and skepticism surrounding a global economic recovery.
A portion of the Partnership's overall gains was offset by losses
of approximately 4.9% recorded in the metals futures markets from
positions in copper, nickel and zinc futures as prices moved
without consistent direction throughout a majority of the year
amid shifting supply and demand concerns. In the energy futures
markets, losses of approximately 3.7% were recorded from long
positions in crude oil futures as prices reversed lower during
May and October amid a temporary easing of tensions between the
U.S. and Iraq.

The Partnership recorded revenues including interest totaling
$8,379,420 and expenses totaling $5,120,660, resulting in net
income of $3,258,760 for the year ended December 31, 2001. The
Partnership's net asset value per Unit increased from $12.55 at
December 31, 2000 to $13.77 at December 31, 2001. Total
redemptions and subscriptions for the year were $4,902,088 and
$20,812,938, respectively, and the Partnership's ending capital
was $47,940,768 at December 31, 2001, an increase of $19,169,610
from ending capital at December 31, 2000 of $28,771,158.

The most significant trading gains of approximately 12.3%
were recorded in the global interest rate futures markets
primarily during August and September from long positions in U.S.
interest rate futures as domestic bond prices trended higher amid
concerns for the U.S. economy, declining stock prices, as well as
in reaction to the Federal Reserve's interest rate cuts. Smaller
gains were recorded from long positions in short-term European
interest rate futures as prices trended higher. In the global
stock index futures markets, gains of approximately 7.4% were
recorded primarily during the third quarter from short positions
in DAX, TOPIX and Nikkei index futures as equity prices moved
sharply lower on corporate profit warnings and amid worries
regarding global economic uncertainty. In the metals markets,
gains of approximately 4.1% were recorded primarily throughout
the third quarter from short futures positions in copper and zinc
as base metals prices trended lower as a result of increased
supplies and weak demand. A portion of the Partnership's overall
gains was partially offset by losses of approximately 1.5%
recorded in the agricultural markets from trading soybean meal
and soybean oil futures.

For an analysis of unrealized gains and (losses) by contract type
and a further description of 2003 trading results, refer to the
Partnership's Annual Report to Limited Partners for the year ended
December 31, 2003, which is incorporated by reference to Exhibit
13.01 of this Form 10-K.
The Partnership's gains and losses are allocated among its
partners for income tax purposes.

Market Risk.
Financial Instruments. The Partnership is a party to financial
instruments with elements of off-balance sheet market and credit
risk. The Partnership trades futures, forwards and options in
interest rates, stock indices, currencies, agriculturals, energies
and metals. In entering into these contracts, the Partnership is
subject to the market risk that such contracts may be
significantly influenced by market conditions, such as interest
rate volatility, resulting in such contracts being less valuable.
If the markets should move against all of the positions held by
the Partnership at the same time, and if the Trading Advisor were
unable to offset positions of the Partnership, the Partnership
could lose all of its assets and the limited partners would
realize a 100% loss.

In addition to the Trading Advisor's internal controls, the
Trading Advisor must comply with the Partnership's trading
policies that include standards for liquidity and leverage that
must be maintained. The Trading Advisor and Demeter monitor the
Partnership's trading activities to ensure compliance with the
trading policies and Demeter can require the Trading Advisor to
modify positions of the Partnership if Demeter believes they
violate the Partnership's trading policies.
Credit Risk.
In addition to market risk, in entering into futures, forward and
options contracts there is a credit risk to the Partnership that
the counterparty on a contract will not be able to meet its
obligations to the Partnership. The ultimate counterparty or
guarantor of the Partnership for futures contracts traded in the
United States and the foreign exchanges on which the Partnership
trades is the clearinghouse associated with such exchange. In
general, a clearinghouse is backed by the membership of the
exchange and will act in the event of non-performance by one of
its members or one of its member's customers, which should
significantly reduce this credit risk. There is no assurance that
a clearinghouse, exchange or other exchange member will meet its
obligations to the Partnership, and Demeter and the commodity
brokers will not indemnify the Partnership against a default by
such parties. Further, the law is unclear as to whether a
commodity broker has any obligation to protect its customers from
loss in the event of an exchange or clearinghouse defaulting on
trades effected for the broker's customers. In cases where the
Partnership trades off-exchange forward contracts with a
counterparty, the sole recourse of the Partnership will be the
forward contracts counterparty.

Demeter deals with these credit risks of the Partnership in
several ways. First, it monitors the Partnership's credit
exposure to each exchange on a daily basis. The commodity
brokers inform the Partnership, as with all their customers, of
its net margin requirements for all its existing open positions,
and Demeter has installed a system which permits it to monitor
the Partnership's potential net credit exposure, exchange by
exchange, by adding the unrealized trading gains on each
exchange, if any, to the Partnership's margin liability thereon.

Second, the Partnership's trading policies limit the amount of its
net assets that can be committed at any given time to futures
contracts and require a minimum amount of diversification in the
Partnership's trading, usually over several different products and
exchanges. Historically, the Partnership's exposure to any one
exchange has typically amounted to only a small percentage of its
total net assets and on those relatively few occasions where the
Partnership's credit exposure climbs above an acceptable level,
Demeter deals with the situation on a case by case basis,
carefully weighing whether the increased level of credit exposure
remains appropriate. Material changes to the trading policies may
be made only with the prior written approval of the limited
partners owning more than 50% of Units then outstanding.

Third, with respect to forward contract trading, the Partnership
trades with only those counterparties which Demeter, together with
Morgan Stanley DW, have determined to be creditworthy. The
Partnership presently deals with MS & Co. as the sole counterparty
on forward contracts.
See "Financial Instruments" under "Notes to Financial
Statements" in the Partnership's Annual Report to Limited
Partners for the year ended December 31, 2003, which is
incorporated by reference to Exhibit 13.01 of this Form 10-K.

Inflation has not been a major factor in the Partnership's
operations.

Item 7A.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, factors that result in frequent
changes in the fair value of the Partnership's open positions, and
consequently in its earnings, whether realized or unrealized, and
cash flow. Profits and losses on open positions of
exchange-traded futures, forwards and options are settled daily
through variation margin.

The Partnership's total market risk may increase or decrease as
it's influenced by a wide variety of factors, including, but not
limited to, the diversification among the Partnership's open
positions, the volatility present within the markets, and the
liquidity of the markets.

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 experiences 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 Partner-
ship'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 and cash flow.

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 Partnership estimates VaR using a model based upon
historical simulation (with a confidence level of 99%) which
involves constructing a distribution of hypothetical daily changes
in the value of a trading portfolio. The VaR model takes into
account linear exposures to risks including 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 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, or one day in 100.
VaR typically does not represent the worst case outcome. 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.

The Partnership's VaR computations are based on the risk
representation of the underlying benchmark for each instrument or
contract and do not distinguish between exchange and non-exchange
dealer-based instruments. They are also not based on exchange
and/or dealer-based maintenance margin requirements.

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 December 31, 2003 and 2002. At
December 31, 2003 and 2002, the Partnership's total
capitalization was approximately $271 million and $116 million,
respectively.

Primary Market December 31, 2003 December 31, 2002
Risk Category Value at Risk Value at Risk

Equity (3.12)% (0.61)%

Currency (2.06) (1.91)

Interest Rate (0.56) (1.89)

Commodity (1.14) (1.62)

Aggregate Value at Risk (3.47)% (3.27)%

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

Because the business of the Partnership 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, which could
positively or negatively materially impact market risk as
measured by VaR.

The table below supplements the December 31, 2003 VaR set
forth above by presenting the Partnership's high, low and average
VaR, as a percentage of total net assets for the four quarter-end
reporting periods from January 1, 2003 through December 31, 2003.

Primary Market Risk Category High Low Average

Equity (3.12)% (0.96)% (2.17)%

Currency (2.06) (0.98) (1.51)

Interest Rate (2.74) (0.33) (1.09)

Commodity (1.44) (0.65) (1.09)

Aggregate Value at Risk (3.88)% (1.72)% (3.17)%

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 provided present the results of the Partnership's
VaR for each of the Partnership's market risk exposures and on an
aggregate basis at December 31, 2003 and 2002 and for the four
quarter-end reporting periods during calendar year 2003. VaR is
not necessarily representative of the historic risk, nor should
it be used to predict 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.

The Partnership also maintains a substantial portion
(approximately 77% as of December 31, 2003) of its available
assets in cash at Morgan Stanley DW. A decline in short-term
interest rates would 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 December 31, 2003, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Equity. The primary market exposure of the Partnership at
December 31, 2003 was to the global stock index sector, primarily
to equity price risk in the G-7 countries. The G-7
countries consist of France, the U.S., Britain, Germany, Japan,
Italy and Canada. The stock index futures traded by the
Partnership are by law limited to futures on broadly-based
indices. At December 31, 2003, the Partnership's primary
exposures were to the DAX (Germany), S&P 500 (U.S.), IBEX 35
(Spain), CAC 40 (France) and NASDAQ (U.S.) stock indices. The
Partnership is exposed to the risk of adverse price trends or
static markets in the U.S., European and Japanese stock indices.
Static markets would not cause major market changes, but would
make it difficult for the Partnership to avoid trendless price
movements resulting in numerous small losses.

Currency. The second largest market exposure of the Partnership
at December 31, 2003 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
December 31, 2003, the Partnership's major exposures were to the
euro, Japanese yen, British pound, Australian dollar, Canadian
dollar and Swiss franc currency crosses, as well as to 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.

Interest Rate. The third largest market exposure of the
Partnership at December 31, 2003 was to the global interest rate
sector. Exposure was primarily spread across the U.S., European
and Japanese 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 interest rate exposure is generally to interest
rate fluctuations in the U.S. and the other G-7 countries.
However, the Partnership also takes futures positions in the
government debt of smaller nations - e.g. Australia. Demeter
anticipates that the G-7 countries 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.

Commodity.
Energy. At December 31, 2003, the Partnership's energy
exposure was primarily to futures contracts in crude oil and
its related products, and natural gas. Price movements in
these markets result from geopolitical developments,
particularly in the Middle East, as well as weather patterns
and other economic fundamentals. Significant profits and
losses, which have been experienced in the past, are
expected to continue to be experienced in the future.
Natural gas has exhibited volatility in prices resulting
from weather patterns and supply and demand factors and will
likely continue in this choppy pattern.

Metals. The Partnership's metals exposure at December 31,
2003 was to fluctuations in the price of precious metals,
such as gold, and base metals, such as aluminum, copper and
zinc. Economic forces, supply and demand inequalities,
geopolitical factors and market expectations influence price
movements in these markets. The Trading Advisor, from time
to time, takes positions when market opportunities develop
and Demeter anticipates that the Partnership will continue
to do so.

Soft Commodities and Agriculturals. At December 31,
2003, the Partnership had exposure to the markets that
comprise these sectors. Most of the exposure was to the
wheat, lean hogs and cocoa markets. Supply and demand
inequalities, severe weather disruptions and market
expectations affect price movements in these markets.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at December 31, 2003:

Foreign Currency Balances. The Partnership's primary
foreign currency balances at December 31, 2003 were in
euros, Japanese yen, Swiss francs and British pounds. The
Partnership controls the non-trading risk of foreign
currency 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 by
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.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements are incorporated by reference to the
Partnership's Annual Report, which is filed as Exhibit 13.01
hereto.

Supplementary data specified by Item 302 of Regulation S-K:

Summary of Quarterly Results (Unaudited)

Quarter Revenues/ Net Net Income/
Ended (Net Losses) Income/(Loss) (Loss) Per Unit

2003
March 31 $ 13,703,187 $ 6,055,004 $ 1.20
June 30 6,009,634 2,287,809 0.38
September 30 (18,042,659) (22,248,748) (2.18)
December 31 45,758,831 41,151,173 3.64

Total $ 47,428,993 $27,245,238 $ 3.04

2002
March 31 $ (1,380,687) $(2,505,649) $(0.66)
June 30 7,280,505 6,117,271 1.34
September 30 27,120,824 21,786,535 4.72
December 31 1,414,372 (771,139) (0.33)

Total $ 34,435,014 $24,627,018 $ 5.07

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES
(a) As of the end of the period covered by this annual
report, the President and Chief Financial Officer of the
general partner, Demeter, have evaluated the
effectiveness of the Partnership's disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-
15(e) of the Exchange Act), and have judged such
controls and procedures to be effective.

(b) There have been no significant changes in the
Partnership's internal controls or in other factors that
could significantly affect these controls subsequent to
the date of their evaluation.

PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

There are no directors or executive officers of the Partnership.
The Partnership is managed by Demeter.

Directors and Officers of the General Partner
The directors and executive officers of Demeter are as follows:

Jeffrey A. Rothman, age 42, is the Chairman of the Board of
Directors and President of Demeter. Mr. Rothman is the Executive
Director of Morgan Stanley Managed Futures, responsible for
overseeing all aspects of the firm's managed futures department.
He is also the Chairman of the Board of Directors of Morgan
Stanley Futures & Currency Management Inc. Mr. Rothman has been
with the managed futures department for seventeen years.
Throughout his career, Mr. Rothman has helped with the
development, marketing and administration of approximately 39
commodity pools. Mr. Rothman is an active member of the Managed
Funds Association and serves on its Board of Directors. Mr.
Rothman has a B.A. degree in Liberal Arts from Brooklyn College,
New York.

Richard A. Beech, age 52, is a Director of Demeter. Mr. Beech has
been associated with the futures industry for over 25 years. He
has been at Morgan Stanley DW since August 1984 where he is
presently an Executive Director and head of Futures, Forex &
Metals. Mr. Beech began his career at the Chicago
Mercantile Exchange, where he became the Chief Agricultural
Economist doing market analysis, marketing and compliance. Prior
to joining Morgan Stanley DW, Mr. Beech worked at two investment
banking firms in operations, research, managed futures and sales
management. Mr. Beech has a B.S. degree in Business
Administration from Ohio State University, and an M.B.A. degree
from Virginia Polytechnic Institute and State University.

Raymond A. Harris, age 47, is a Director of Demeter and of Morgan
Stanley Futures & Currency Management Inc. Mr. Harris is
currently Managing Director and head of Client Solutions for
Morgan Stanley Individual Investor Group. Mr. Harris joined
Morgan Stanley in 1982 and served in financial and operational
assignments for Dean Witter Reynolds. In 1994, he joined the
Discover Financial Services division, leading restructuring and
product development efforts. Mr. Harris became Chief
Administrative Officer for Morgan Stanley Investment Management in
1999. In 2001, he was named head of Global Products and Services
for Investment Management. Mr. Harris has an M.B.A. in Finance
from the University of Chicago and a B.A. degree from Boston
College.

Frank Zafran, age 48, is a Director of Demeter and of Morgan
Stanley Futures & Currency Management Inc. Mr. Zafran is an
Executive Director of Morgan Stanley and, in September 2002, was
named Chief Administrative Officer of Morgan Stanley's
Client Solutions Division. Mr. Zafran joined the firm in 1979 and
has held various positions in Corporate Accounting and the
Insurance Department, including Senior Operations Officer -
Insurance Division, until his appointment in 2000 as Director of
401(k) Plan Services, responsible for all aspects of 401(k) Plan
Services including marketing, sales and operations. Mr. Zafran
received a B.S. degree in Accounting from Brooklyn College, New
York.

Douglas J. Ketterer, age 38, was named a Director of Demeter, and
confirmed by the National Futures Association as a principal of
Demeter on October 27, 2003. Mr. Ketterer is a Managing Director
and head of the Investment Solutions Group, which is comprised of
a number of departments which offer products and services through
Morgan Stanley's Individual Investor Group (including Managed
Futures, Alternative Investments, Insurance Services, Personal
Trust, Corporate Services, and others). Mr. Ketterer joined the
firm in 1990 in the Corporate Finance Division as a part of the
Retail Products Group. He later moved to the origination side of
Investment Banking, and then, after the merger between Morgan
Stanley and Dean Witter, served in the Product Development Group
at Morgan Stanley Dean Witter Advisors (now known as Morgan
Stanley Funds). From the summer of 2000 to the summer of 2002,
Mr. Ketterer served as the Chief Administrative Officer for Morgan
Stanley Investment Management, where he headed the Strategic
Planning & Administrative Group. Mr. Ketterer received his
M.B.A. from New York University's Leonard N. Stern School of
Business and his B.S. in Finance from the University at Albany's
School of Business.

Jeffrey S. Swartz, age 36, was named a Director of Demeter, and
confirmed by the National Futures Association as a principal of
Demeter on October 23, 2003. Mr. Swartz is a Managing Director
and Director of the Mass Affluent Segment of Morgan Stanley's
Individual Investor Group. Mr. Swartz began his career with Morgan
Stanley in 1990, working as a Financial Advisor in Boston. He was
appointed Sales Manager of the Boston office in 1994, and served
in that role for two years. In 1996, he was named Branch Manager
of the Cincinnati office. In 1999, Mr. Swartz was named Associate
Director of the Midwest Region, which consisted of 10 states and
approximately 90 offices. Mr. Swartz served in this capacity
until October of 2001, when he was named Director of Investor
Advisory Services ("IAS") Strategy and relocated to IAS
headquarters in New York. In December of 2002, Mr. Swartz was
promoted to Managing Director and Chief Operating Officer of IAS
and has recently assumed the responsibility for managing the Mass
Affluent Client Segment. Mr. Swartz received his degree in
Business Administration from the University of New Hampshire.

Jeffrey D. Hahn, age 46, is the Chief Financial Officer of
Demeter. Mr. Hahn began his career at Morgan Stanley in 1992 and
is currently an Executive Director responsible for the
management and supervision of the accounting, reporting, tax and
finance functions for the firm's private equity, managed futures,
and certain legacy real estate investing activities. He is also
the Chief Financial Officer of Morgan Stanley Futures & Currency
Management Inc. From August 1984 through May 1992, Mr. Hahn held
various positions as an auditor at Coopers & Lybrand, specializing
in manufacturing businesses and venture capital organizations. Mr.
Hahn received his B.A. in Economics from St. Lawrence University
in 1979, an M.B.A. from Pace University in 1984, and is a
Certified Public Accountant.

All of the foregoing directors have indefinite terms.

The Audit Committee
The Partnership is operated by its general partner, Demeter, and
does not have an audit committee. As such, the entire Board of
Directors of Demeter serves as the audit committee. None of the
directors are considered to be "independent" as that term is used
in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange
Act of 1934, as amended. The Board of Directors of Demeter has
determined that Mr. Jeffrey D. Hahn is the audit committee
financial expert.

Section 16(a) Beneficial Ownership Reporting Compliance
The Partnership has no directors, executive officers or
greater than 10 percent beneficial owners and none of the
directors or executive officers of Demeter, the general partner of
the Partnership, own Units of the Partnership. As such, no Forms
3, 4, or 5 have been filed.

Code of Ethics
The Partnership has not adopted a code of ethics that applies to
the Partnership's principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions. The Partnership is operated by its
general partner, Demeter. The President, Chief Financial Officer
and each member of the Board of Directors of Demeter are employees
of Morgan Stanley and are subject to the code of ethics adopted by
Morgan Stanley, the text of which can be viewed on Morgan
Stanley's website at www.morganstanley.com/ourcommitment/codeofcon
duct.html.

Item 11. EXECUTIVE COMPENSATION
The Partnership has no directors and executive officers. As a
limited partnership, the business of the Partnership is managed by
Demeter, which is responsible for the administration of the
business affairs of the Partnership but receives no compensation
for such services.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

(a) Security Ownership of Certain Beneficial Owners - At December
31, 2003, there were no persons known to be beneficial owners of
more than 5 percent of the Units.

(b) Security Ownership of Management - At December 31, 2003,
Demeter owned 130,627.064 Units of general partnership interest,
representing a 1.06 percent interest in the Partnership.

(c) Changes in Control - None.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Refer to Note 2 - "Related Party Transactions" of "Notes to
Financial Statements", in the accompanying Annual Report to
Limited Partners for the year ended December 31, 2003, which is
incorporated by reference to Exhibit 13.01 of this Form 10-K. In
its capacity as the Partnership's retail commodity broker, Morgan
Stanley DW received commodity brokerage fees (paid and accrued by
the Partnership) of $11,874,342 for the year ended December 31,
2003.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Morgan Stanley DW, on behalf of the Partnership, pays all
accounting fees. The Partnership reimburses Morgan Stanley DW
through the brokerage fees it pays, as discussed in the
Notes to Financial Statements in the Annual Report to the Limited
Partners for the year ended December 31, 2003.

(1) Audit Fees. The aggregate fees for professional services
rendered by Deloitte & Touche LLP in connection with their audit
of the Partnership's financial statements and reviews of the
financial statements included in the Quarterly Reports on Form
10-Q and in connection with statutory and regulatory filings for
the years ended December 31, 2003 and 2002 were approximately
$38,750 and $37,846, respectively.

(2) Audit-Related Fees. There were no fees for assurance and
related services rendered by Deloitte & Touche LLP for the years
ended December 31, 2003 and 2002.

(3) Tax Fees. The aggregate fees for tax compliance services
rendered by Deloitte & Touche LLP for the years ended December
31, 2003 and 2002 were approximately $29,914 and $29,066,
respectively.

(4) All Other Fees. None.

As of the date of this Report, the Board of Directors of Demeter
has not adopted pre-approval policies and procedures. As a
result, all services provided by Deloitte & Touche LLP must be
directly pre-approved by the Board of Directors of Demeter.

PART IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K

(a) 1. Listing of Financial Statements
The following financial statements and report of independent
auditors, all appearing in the accompanying Annual Report to
Limited Partners for the year ended December 31, 2003 are
incorporated by reference to Exhibit 13.01 of this Form 10-K:
- - Report of Deloitte & Touche LLP, independent auditors, for the
years ended December 31, 2003, 2002, and 2001.

- - Statements of Financial Condition, including the Schedules of
Investments, as of December 31, 2003 and 2002.

- - Statements of Operations, Changes in Partners' Capital, and
Cash Flows for the years ended December 31, 2003, 2002, and
2001.

- - Notes to Financial Statements.

With the exception of the aforementioned information and the
information incorporated in Items 7, 8, and 13, the Annual Report
to Limited Partners for the year ended December 31, 2003 is not
deemed to be filed with this report.

2. Listing of Financial Statement Schedules
No financial statement schedules are required to be filed with
this report.

(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the Partnership during
the last quarter of the period covered by this report.

(c) Exhibits
Refer to Exhibit Index on Pages E-1 to E-3.

SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) 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 GRAHAM L.P.
(Registrant)

BY: Demeter Management Corporation,
General Partner

March 15, 2004 BY: /s/ Jeffrey A. Rothman
Jeffrey A. Rothman, President

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

Demeter Management Corporation.

BY: /s/ Jeffrey A. Rothman March 15, 2004
Jeffrey A. Rothman, President

/s/ Douglas J. Ketterer March 15, 2004
Douglas J. Ketterer, Director

/s/ Jeffrey S. Swartz March 15, 2004
Jeffrey S. Swartz, Director

/s/ Richard A. Beech March 15, 2004
Richard A. Beech, Director

/s/ Raymond A. Harris March 15, 2004
Raymond A. Harris, Director

/s/ Frank Zafran March 15, 2004
Frank Zafran, Director

/s/ Jeffrey D. Hahn March 15, 2004
Jeffrey D. Hahn, Chief
Financial Officer

EXHIBIT INDEX

ITEM
3.01 Form of Amended and Restated Limited Partnership Agreement
of the Partnership, is incorporated by reference to Exhibit
A of the Partnership's Prospectus, dated February 26, 2003,
filed with the Securities and Exchange Commission pursuant
to Rule 424(b)(3) under the Securities Act of 1933, as
amended, on March 18, 2003.
3.02 Certificate of Limited Partnership, dated July 15, 1998,
is incorporated by reference to Exhibit 3.02 of the
Partnership's Registration Statement on Form S-1 (File No.
333-60115) filed with the Securities and Exchange
Commission on July 29, 1998.
3.03 Certificate of Amendment of Certificate of Limited
Partnership, dated November 1, 2001 (changing its name
from Morgan Stanley Dean Witter Graham L.P.), is
incorporated by reference to Exhibit 3.01 of the
Partnership's Form 8-K (File No. 0-25603) filed with the
Securities and Exchange Commission on November 6, 2001.
10.01 Management Agreement, dated as of November 6, 1998, among
the Partnership, Demeter, and Graham Capital Management,
L.P., is incorporated by reference to Exhibit 10.01 of the
Partnership's Quarterly Report on Form 10-Q (File No. 0-
25603) filed with the Securities and Exchange Commission
on May 17, 1999.
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 February 26, 2003, filed
with the Securities and Exchange Commission pursuant to
Rule 424(b)(3) under the Securities Act of 1933, as
amended, on March 18, 2003.
10.03 Amended and Restated Escrow Agreement, dated as of August
31, 2002, among the Partnership, Morgan Stanley Charter
Millburn L.P., Morgan Stanley Charter Welton L.P., Morgan
Stanley Charter MSFCM L.P., Morgan Stanley DW and JP
Morgan Chase Bank, is incorporated by reference to Exhibit
10.04 of the Partnership's Registration Statement on Form
S-1 (File No. 333-103166) filed with the Securities and
Exchange Commission on February 13, 2003.

E-1

10.04 Amended and Restated Customer Agreement between the
Partnership and Morgan Stanley DW, dated as of November
13, 2000, is incorporated by reference to Exhibit 10.01 of
the Partnership's Form 8-K (File No. 0-25603) filed with
the Securities and Exchange Commission on November 6,
2001.
10.05 Commodity Futures Customer Agreement between MS & Co. and
the Partnership, and acknowledged and agreed to by Morgan
Stanley DW, dated as of November 6, 2000, is incorporated
by reference to Exhibit 10.02 of the Partnership's Form 8-K
(File No. 0-25603) filed with the Securities and Exchange
Commission on November 6, 2001.
10.06 Customer Agreement between the Partnership and MSIL, dated
as of November 6, 2000, is incorporated by reference to
Exhibit 10.04 of the Partnership's Form 8-K (File No. 0-
25603) filed with the Securities and Exchange Commission on
November 6, 2001.
10.07 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. 0-25603) filed with the
Securities and Exchange Commission on November 6, 2001.
10.08 Form of Subscription Agreement Update Form is incorporated
by reference to Exhibit C of the Partnership's Prospectus,
dated February 26, 2003, filed with the Securities and
Exchange Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933, as amended, on March 18, 2003.
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. 0-25603) filed with the
Securities and Exchange Commission on November 6, 2001.
13.01 December 31, 2003 Annual Report to Limited Partners is
filed herewith.
31.01 Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to rules 13a-15(e) and 15d-15(e), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

E-2

31.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to rules 13a-15(e) and 15d-15(e), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
32.01 Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
32.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

E-3

Morgan Stanley
Charter Series

December 31, 2003
Annual Report

[LOGO] Morgan Stanley

MORGAN STANLEY CHARTER SERIES

HISTORICAL FUND PERFORMANCE

Presented below is the percentage change in Net Asset Value per Unit from the
start of every calendar year for each Fund in the Morgan Stanley Charter
Series. Also provided is the inception-to-date return and the compound
annualized return since inception for each Fund. Past performance is not
necessarily indicative of future results.

INCEPTION- COMPOUND
TO-DATE ANNUALIZED
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 RETURN RETURN
FUND % % % % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------

Charter Campbell -- -- -- -- -- -- -- -- (4.2) 16.3 11.4 9.0
(3 mos.)
- ---------------------------------------------------------------------------------------------------------
Charter MSFCM... (7.3) 21.9 4.0 26.2 5.1 (9.2) 23.8 (3.3) 29.1 (5.1) 107.2 7.7
(10 mos.)
- ---------------------------------------------------------------------------------------------------------
Charter Graham.. -- -- -- -- -- 2.9 22.0 9.7 36.8 16.1 118.8 17.6
(10 mos.)
- ---------------------------------------------------------------------------------------------------------
Charter Millburn -- -- -- -- -- (7.2) 12.1 (11.3) 21.1 (0.6) 11.1 2.2
(10 mos.)
- ---------------------------------------------------------------------------------------------------------

DEMETER MANAGEMENT CORPORATION

825 Third Avenue, 9th Floor
New York, NY 10022
Telephone (212) 310-6444

MORGAN STANLEY CHARTER SERIES
ANNUAL REPORT
2003

Dear Limited Partner:
This marks the second annual report for Morgan Stanley Charter Campbell L.P.,
the fifth annual report for Morgan Stanley Charter Graham L.P. and Morgan
Stanley Charter Millburn L.P., and the tenth annual report for Morgan Stanley
Charter MSFCM L.P. The Net Asset Value per Unit for each of the four Charter
Series Funds ("Fund(s)") as of December 31, 2003 was as follows:

% CHANGE
FUNDS N.A.V. FOR YEAR
--------------------------------

Charter Campbell $11.14 16.3%
--------------------------------
Charter MSFCM $20.72 -5.1%
--------------------------------
Charter Graham $21.88 16.1%
--------------------------------
Charter Millburn $11.11 -0.6%
--------------------------------

Since their inception in March 1999, Charter Graham has increased by 118.8%
(a compound annualized return of 17.6%) and Charter Millburn has increased by
11.1% (a compound annualized return of 2.2%). Since its inception in March
1994, Charter MSFCM has increased by 107.2% (a compound annualized return of
7.7%). Since its inception in October 2002, Charter Campbell has increased by
11.4% (a compound annualized return of 9.0%).

Detailed performance information for each Fund is located in the body of the
financial report. For each Fund, we provide a trading results by sector chart
that portrays trading gains and trading losses for the year in each sector in
which the Fund participates.

The trading results by sector chart indicates the year's composite percentage
returns generated by the specific assets dedicated to trading within each
market sector in which each Fund participates. Please note that there is not an
equal amount of assets in each market sector, and the specific allocations of
assets by a Fund to each sector will vary over time within a predetermined
range. Below each chart is a description of the factors that influenced trading
gains and trading losses within each Fund during the year.

Should you have any questions concerning this report, please feel free to
contact Demeter Management Corporation, 825 Third Avenue, 9th Floor, New York,
NY 10022 or your Morgan Stanley Financial Advisor.

I hereby affirm, that to the best of my knowledge and belief, the information
contained in this report is accurate and complete. Past performance is no
guarantee of future results.

Sincerely,

/s/ Jeffrey A. Rothman
Jeffrey A. Rothman
Chairman and President
Demeter Management Corporation
General Partner for
Morgan Stanley Charter Campbell L.P.
Morgan Stanley Charter MSFCM L.P.
Morgan Stanley Charter Graham L.P.
Morgan Stanley Charter Millburn L.P.

CHARTER CAMPBELL

[CHART]

Year ended December 31, 2003
----------------------------
Currencies 29.14%
Interest Rates -3.68%
Stock Indices 5.66%
Energies -1.24%
Metals -0.33%

Note:Reflects trading results only and does not include fees or interest income.

FACTORS INFLUENCING ANNUAL TRADING GAINS:
.. In the currency markets, gains were produced from long positions in the
euro, British pound, and Japanese yen versus the U.S. dollar during a
majority of the year as the value of the U.S. dollar declined sharply due to
geopolitical uncertainty and negative economic data. Additional currency
gains were recorded from long positions in the Australian dollar, New
Zealand dollar, South African rand, and Canadian dollar against the U.S.
dollar as the value of the "commodity currencies" increased versus the U.S.
dollar on the heels of higher commodity prices and a significant interest
rate differential between these countries and the U.S.
.. In the global stock index futures markets, gains were experienced from long
positions in U.S., Pacific Rim, and European stock index futures as global
equity prices moved higher throughout the latter half of the year due to
continued optimism regarding a global economic recovery.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
.. In the global interest rate markets, losses were experienced primarily
during the third quarter from positions in U.S., European, and Japanese
interest rate futures as prices first declined during July amid rising
interest rates and a rally in global equities and then reversed higher
during August and September as renewed fears for an unsustainable economic
recovery resurfaced.

CHARTER CAMPBELL
(continued)

.. Additional losses were recorded in the energy markets, primarily during
October, as the Fund entered the month with short natural gas positions that
proved unprofitable as prices rallied during the first part of the month. In
response to this rise in prices, the Fund reversed its position from short
to long, only to see prices decline in the latter part of the month. In
December, long futures positions in natural gas resulted in further losses
as prices fell sharply following mild temperatures across the U.S. and U.S.
Department of Energy reports of increases in inventories that were much
larger than expected. Elsewhere in the energy markets, losses were recorded
from futures positions in crude oil and its related products during
September as prices trailed lower and then unexpectedly reversed higher
after OPEC announced that it would move to reduce output.

CHARTER MSFCM

[CHART]

Year ended December 31, 2003
-----------------------------
Currencies 12.67%
Interest Rates -5.87%
Stock Indices 0.42%
Energies -2.27%
Metals 1.96%

Note:Reflects trading results only and does not include fees or interest income.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
.. In the global interest rate markets, losses were experienced from short
positions in Japanese, Australian and European interest rate futures during
September as bond prices reversed higher due to renewed skepticism regarding
a global economic recovery and lower equity prices. Further losses in this
sector stemmed from long positions in Australian interest rate futures
during March as prices reversed sharply lower amid reports of advancing
Coalition forces in the Persian Gulf region. Losses within this sector
continued in December as European bond prices increased in value amid
perceptions that the European Central Bank would maintain low interest
rates. Consequently, losses were experienced from short positions in
European interest rate futures.
.. Additional losses were recorded in the energy markets, primarily during
October, as the Fund entered the month with short natural gas positions that
proved unprofitable as prices rallied during the first part of the month. In
response to this rise in prices, the Fund reversed its position from short
to long, only to see prices decline in the latter part of the month. Further
losses were incurred in the energy sector from positions in crude oil
futures as prices moved erratically during October in response to
geopolitical and supply/demand factors. Additional losses were experienced
during November and December as energy prices continued to trade in a
volatile fashion, moving in one direction and then

CHARTER MSFCM
(continued)

sharply reversing. This type of volatility was particularly evident in the
crude oil market in November as prices rallied over the first portion of the
month only to sharply decline during the latter portion of the month. In
December, long futures positions in natural gas resulted in losses as prices
fell sharply following mild temperatures across the U.S. and U.S. Department
of Energy reports of increases in U.S. inventories that were much larger
than expected.

FACTORS INFLUENCING ANNUAL TRADING GAINS:
.. In the currency markets, gains were produced from long positions in the
Australian dollar versus the U.S. dollar during a majority of the year as
the value of the Australian currency increased versus the U.S. dollar
throughout much of the year on the heels of higher commodity prices and a
significant interest rate differential between the two countries. Additional
gains resulted from long positions in the euro, Singapore dollar, Swedish
krona, and Swiss franc versus the U.S. dollar as the value of the U.S.
dollar declined throughout much of the year due to geopolitical uncertainty
and negative economic data. Additional currency gains were recorded from
long positions in the euro versus the Japanese yen.
.. In the metals markets, gains were recorded, primarily during the fourth
quarter, from long positions in copper and nickel as base metal prices
rallied in response to growing investor sentiment that the global economy
was on the path to recovery and amid increased demand, especially from China.

CHARTER GRAHAM

[CHART]

Year ended December 31, 2003
----------------------------
Currencies 16.97%
Interest Rates -5.00%
Stock Indices 13.95%
Energies 1.25%
Metals 3.18%
Agriculturals -1.21%

Note:Reflects trading results only and does not include fees or interest income.

FACTORS INFLUENCING ANNUAL TRADING GAINS:
.. In the currency markets, gains were produced from long positions in the
Australian dollar, Canadian dollar, South African rand, and New Zealand
dollar versus the U.S. dollar during a majority of the year as the value of
the "commodity currencies" increased sharply versus the U.S. dollar on the
heels of higher commodity prices and a significant interest rate
differential between these countries and the U.S. Additional gains resulted
from long positions in the euro, Japanese yen, and Swiss franc versus the
U.S. dollar as the value of the U.S. dollar declined throughout much of the
year due to geopolitical uncertainty and negative economic data. Additional
gains were recorded from long cross-rate positions in the euro versus the
British pound and Japanese yen.
.. In the global stock index futures markets, gains were experienced from long
positions in U.S., Pacific Rim, and European stock index futures as global
equity prices moved higher during the latter half of the year due to
continued optimism regarding a global economic recovery.
.. Additional gains were recorded in the metals markets, primarily during the
fourth quarter, from long positions in copper, nickel, and zinc as base
metal prices rallied in response to growing investor sentiment that the
global economy was on the path to recovery and amid increased demand,
especially from China.

CHARTER GRAHAM
(continued)

.. In the energy markets, gains were experienced primarily during January and
February from long positions in natural gas futures as prices jumped sharply
higher amid fears that extremely cold weather in the U.S. northeast and
midwest could further deplete already diminished supplies. Additional gains
were recorded from long positions in crude oil futures as prices continued
to trend higher during those months amid the increasing likelihood of
military action against Iraq.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
.. In the global interest rate markets, losses were recorded primarily during
the third quarter from positions in U.S., European, and Japanese interest
rate futures as prices first declined during July amid rising interest rates
and a rally in global equities. Prices then reversed higher during August
and September as renewed fears for an unsustainable economic recovery
resurfaced.
.. Smaller losses were recorded in the agricultural markets from short
positions in wheat and corn futures during early May as prices moved higher
amid concerns of weather related crop damage in the U.S. midwest.

CHARTER MILLBURN

[CHART]

Year ended December 31, 2003
----------------------------
Currencies 5.69%
Interest Rates 0.15%
Stock Indices 3.61%
Energies -1.87%
Metals 2.03%
Agriculturals -2.09%

Note:Reflects trading results only and does not include fees or interest income.

FACTORS INFLUENCING ANNUAL TRADING GAINS:
.. In the currency markets, gains were produced from long positions in the euro
versus the U.S. dollar as the value of the U.S. dollar declined against the
euro throughout a majority of the year due to geopolitical uncertainty,
negative economic data, and the decision by the European Central Bank to
leave interest rates unchanged. Additional gains were recorded from long
positions in the Australian dollar, New Zealand dollar, and South African
rand versus the U.S. dollar during much of the year as the value of the
"commodity currencies" increased versus the U.S. dollar on the heels of
higher commodity prices and a significant interest rate differential between
these countries and the U.S.
.. Gains were recorded in the global stock index futures markets from long
positions in Pacific Rim and U.S. stock index futures as global equity
prices moved higher throughout the latter half of the year due to continued
optimism regarding a global economic recovery.
.. In the metals markets, gains were produced by long positions in gold futures
as prices trended higher, ultimately climbing to seven-year highs in
December, due to weakness in the U.S. dollar and technically-based buying.
Smaller gains were recorded from long copper positions during the fourth
quarter.

CHARTER MILLBURN
(continued)

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
.. In the agricultural markets, losses were experienced from positions in corn
futures as prices moved without consistent direction during the first three
quarters of the year amid weather-related concerns throughout the U.S.
midwest.
.. In the energy markets, losses were incurred primarily during October, as the
Fund entered the month with short natural gas positions which proved
unprofitable as prices rallied during the first part of the month. In
response to this rise in prices, the Fund reversed its position from short
to long, only to see prices decline in the latter part of the month.
Additional losses were incurred in the energy sector from positions in crude
oil futures as prices moved erratically during October in response to
geopolitical and supply/demand factors. Additional losses were experienced
during November as crude oil prices continued to trade in a volatile
fashion, moving in one direction and then sharply reversing. In December,
long futures positions in natural gas resulted in losses as prices fell
sharply following mild temperatures across the U.S. and U.S. Department of
Energy reports of increases in U.S. inventories that were much larger than
expected.

MORGAN STANLEY CHARTER SERIES

INDEPENDENT AUDITORS' REPORT

To the Limited Partners and the General Partner of Morgan Stanley Charter
Campbell L.P., Morgan Stanley Charter MSFCM L.P., Morgan Stanley Charter Graham
L.P. and Morgan Stanley Charter Millburn L.P.:

We have audited the accompanying statements of financial condition, including
the schedules of investments, of Morgan Stanley Charter Campbell L.P., Morgan
Stanley Charter MSFCM L.P., Morgan Stanley Charter Graham L.P. and Morgan
Stanley Charter Millburn L.P. (collectively, the "Partnerships"), as of
December 31, 2003 and 2002, and the related statements of operations, changes
in partners' capital, and cash flows for each of the three years in the period
ended December 31, 2003 for Morgan Stanley Charter MSFCM L.P., Morgan Stanley
Charter Graham L.P. and Morgan Stanley Charter Millburn L.P., and for the year
ended December 31, 2003 and the period from October 1, 2002 (commencement of
operations) to December 31, 2002 for Morgan Stanley Charter Campbell L.P. These
financial statements are the responsibility of the Partnerships' management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Morgan Stanley Charter Campbell L.P.,
Morgan Stanley Charter MSFCM L.P., Morgan Stanley Charter Graham L.P. and
Morgan Stanley Charter Millburn L.P. as of December 31, 2003 and 2002, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2003 for Morgan Stanley Charter MSFCM L.P.,
Morgan Stanley Charter Graham L.P. and Morgan Stanley Charter Millburn L.P.,
and for the year ended December 31, 2003 and the period from October 1, 2002
(commencement of operations) to December 31, 2002 for Morgan Stanley Charter
Campbell L.P. in conformity with

accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP/s/

New York, New York
March 2, 2004

MORGAN STANLEY CHARTER CAMPBELL L.P.

STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31,
----------------------
2003 2002
----------- ----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 97,828,371 15,406,094
Net unrealized gain on open contracts (MS&Co.) 5,068,363 500,205
Net unrealized gain (loss) on open contracts (MSIL) 144,170 (3,518)
----------- ----------
Total net unrealized gain on open contracts 5,212,533 496,687
----------- ----------
Total Trading Equity 103,040,904 15,902,781
Subscriptions receivable 9,775,917 3,827,157
Interest receivable (Morgan Stanley DW) 70,846 13,716
----------- ----------
Total Assets 112,887,667 19,743,654
=========== ==========

LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 825,951 20,297
Accrued brokerage fees (Morgan Stanley DW) 508,438 85,912
Accrued management fees 215,577 35,002
Accrued incentive fee 9,503 --
----------- ----------
Total Liabilities 1,559,469 141,211
----------- ----------
PARTNERS' CAPITAL
Limited Partners (9,879,493.243 and
2,023,938.819 Units, respectively) 110,098,161 19,384,720
General Partner (110,375.550 and
22,732.308 Units, respectively) 1,230,037 217,723
----------- ----------
Total Partners' Capital 111,328,198 19,602,443
----------- ----------
Total Liabilities and Partners' Capital 112,887,667 19,743,654
=========== ==========
NET ASSET VALUE PER UNIT 11.14 9.58
=========== ==========

STATEMENTS OF OPERATIONS

FOR THE PERIOD FROM
OCTOBER 1, 2002
FOR THE YEAR (COMMENCEMENT
ENDED OF OPERATIONS) TO
DECEMBER 31, DECEMBER 31,
2003 2002
------------ -------------------
$ $

REVENUES
Trading profit (loss):
Realized 8,138,778 (424,353)
Net change in unrealized 4,715,846 496,687
---------- --------
Total Trading Results 12,854,624 72,334
Interest income (Morgan Stanley DW) 522,737 35,475
---------- --------
Total 13,377,361 107,809
---------- --------
EXPENSES
Brokerage fees (Morgan Stanley DW) 3,807,406 201,253
Management fees 1,586,956 81,992
Incentive fees 632,951 --
---------- --------
Total 6,027,313 283,245
---------- --------
NET INCOME (LOSS) 7,350,048 (175,436)
========== ========

NET INCOME (LOSS) ALLOCATION:
Limited Partners 7,267,734 (173,159)
General Partner 82,314 (2,277)

NET INCOME (LOSS) PER UNIT:
Limited Partners 1.56 (0.42)
General Partner 1.56 (0.42)

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER MSFCM L.P.

STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31,
----------------------
2003 2002
----------- ----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 161,809,223 73,899,220

Net unrealized gain (loss) on open contracts
(MSIL) 3,771,371 (2,026,931)
Net unrealized gain on open contracts (MS&Co.) 3,139,491 9,592,834
----------- ----------
Total net unrealized gain on open contracts 6,910,862 7,565,903
----------- ----------
Total Trading Equity 168,720,085 81,465,123
Subscriptions receivable 8,566,805 3,667,007
Interest receivable (Morgan Stanley DW) 122,459 78,484
----------- ----------
Total Assets 177,409,349 85,210,614
=========== ==========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 2,825,203 276,125
Accrued brokerage fees (Morgan Stanley DW) 840,610 428,726
Accrued management fees (MSFCM) 268,996 127,030
----------- ----------
Total Liabilities 3,934,809 831,881
----------- ----------
PARTNERS' CAPITAL
Limited Partners (8,284,969.696 and
3,820,623.306 Units, respectively) 171,628,106 83,443,360
General Partner (89,132.554 and
42,827.965 Units, respectively) 1,846,434 935,373
----------- ----------
Total Partners' Capital 173,474,540 84,378,733
----------- ----------
Total Liabilities and Partners' Capital 177,409,349 85,210,614
=========== ==========
NET ASSET VALUE PER UNIT 20.72 21.84
=========== ==========

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
2003 2002 2001
----------- ---------- ----------
$ $ $

REVENUES
Trading profit (loss):
Realized (3,248,330) 12,083,168 5,807,007
Net change in unrealized (655,041) 8,667,368 (4,973,466)
Proceeds from Litigation Settlement -- 292,406 --
----------- ---------- ----------
Total Trading Results (3,903,371) 21,042,942 833,541
Interest income (Morgan Stanley DW) 1,305,055 937,878 1,431,775
----------- ---------- ----------
Total (2,598,316) 21,980,820 2,265,316
----------- ---------- ----------
EXPENSES
Brokerage fees (Morgan Stanley DW) 8,960,530 3,858,279 2,759,119
Management fees (MSFCM) 2,752,466 1,132,395 788,319
Incentive fees (MSFCM) 2,010,766 2,582,720 148,065
----------- ---------- ----------
Total 13,723,762 7,573,394 3,695,503
----------- ---------- ----------
NET INCOME (LOSS) (16,322,078) 14,407,426 (1,430,187)
=========== ========== ==========

NET INCOME (LOSS) ALLOCATION:
Limited Partners (16,143,139) 14,239,699 (1,410,776)
General Partner (178,939) 167,727 (19,411)

NET INCOME (LOSS) PER UNIT:
Limited Partners (1.12) 4.92 (0.58)
General Partner (1.12) 4.92 (0.58)

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER GRAHAM L.P.

STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31,
-----------------------
2003 2002
----------- -----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 245,088,422 104,510,473
Net unrealized gain on open contracts
(MS&Co.) 9,532,167 9,176,225
Net unrealized gain (loss) on open contracts
(MSIL) 6,934,499 (1,963,300)
----------- -----------
Total net unrealized gain on open contracts 16,466,666 7,212,925
----------- -----------
Total Trading Equity 261,555,088 111,723,398
Subscriptions receivable 14,005,999 5,780,876
Interest receivable (Morgan Stanley DW) 196,094 113,169
----------- -----------
Total Assets 275,757,181 117,617,443
=========== ===========

LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 3,370,668 482,247
Accrued brokerage fees (Morgan Stanley DW) 1,270,243 570,067
Accrued management fees 406,478 168,909
----------- -----------
Total Liabilities 5,047,389 1,221,223
----------- -----------
PARTNERS' CAPITAL
Limited Partners (12,239,934.203 and
6,112,309.183 Units, respectively) 267,851,230 115,164,948
General Partner (130,627.064 and
65,349.049 Units, respectively) 2,858,562 1,231,272
----------- -----------
Total Partners' Capital 270,709,792 116,396,220
----------- -----------
Total Liabilities and Partners' Capital 275,757,181 117,617,443
=========== ===========
NET ASSET VALUE PER UNIT 21.88 18.84
=========== ===========

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
2003 2002 2001
---------- ---------- ----------
$ $ $

REVENUES
Trading profit (loss):
Realized 36,375,835 26,923,850 9,678,296
Net change in unrealized 9,253,741 6,346,817 (2,549,392)
---------- ---------- ----------
Total Trading Results 45,629,576 33,270,667 7,128,904
Interest income (Morgan Stanley DW) 1,799,417 1,164,347 1,250,516
---------- ---------- ----------
Total 47,428,993 34,435,014 8,379,420
---------- ---------- ----------
EXPENSES
Brokerage fees (Morgan Stanley DW) 11,874,342 4,751,864 2,476,549
Incentive fees 4,657,891 3,660,660 1,936,526
Management fees 3,651,522 1,395,472 707,585
---------- ---------- ----------
Total 20,183,755 9,807,996 5,120,660
---------- ---------- ----------
NET INCOME 27,245,238 24,627,018 3,258,760
========== ========== ==========
Net Income Allocation:
Limited Partners 26,947,948 24,356,676 3,223,806
General Partner 297,290 270,342 34,954
Net Income per Unit:
Limited Partners 3.04 5.07 1.22
General Partner 3.04 5.07 1.22

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER MILLBURN L.P.

STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31,
---------------------
2003 2002
---------- ----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 59,756,846 40,616,156
Net unrealized gain on open contracts (MS&Co.) 4,376,376 2,778,058
Net unrealized loss on open contracts (MSIL) -- (136,681)
---------- ----------
Total net unrealized gain on open contracts 4,376,376 2,641,377
---------- ----------
Total Trading Equity 64,133,222 43,257,533
Subscriptions receivable 2,719,812 1,528,398
Interest receivable (Morgan Stanley DW) 45,599 48,632
---------- ----------
Total Assets 66,898,633 44,834,563
========== ==========

LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 1,601,321 266,141
Accrued brokerage fees (Morgan Stanley DW) 319,177 222,620
Accrued management fees 102,137 65,961
---------- ----------
Total Liabilities 2,022,635 554,722
---------- ----------
PARTNERS' CAPITAL
Limited Partners (5,778,353.071 and
3,916,281.429 Units, respectively) 64,188,800 43,800,015
General Partner (61,862.368 and
42,902.576 Units, respectively) 687,198 479,826
---------- ----------
Total Partners' Capital 64,875,998 44,279,841
---------- ----------
Total Liabilities and Partners' Capital 66,898,633 44,834,563
========== ==========
NET ASSET VALUE PER UNIT 11.11 11.18
========== ==========

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
2003 2002 2001
---------- --------- ----------
$ $ $

REVENUES
Trading profit (loss):
Realized 1,603,313 8,189,036 1,548,568
Net change in unrealized 1,734,999 1,206,647 (3,536,111)
---------- --------- ----------
Total Trading Results 3,338,312 9,395,683 (1,987,543)
Interest income (Morgan Stanley DW) 629,921 603,947 1,143,337
---------- --------- ----------
Total 3,968,233 9,999,630 (844,206)
---------- --------- ----------
EXPENSES
Brokerage fees (Morgan Stanley DW) 3,658,103 2,355,852 2,168,012
Management fees 1,122,424 690,564 619,432
Incentive fees 476,219 99,341 --
---------- --------- ----------
Total 5,256,746 3,145,757 2,787,444
---------- --------- ----------
NET INCOME (LOSS) (1,288,513) 6,853,873 (3,631,650)
========== ========= ==========
Net Income (Loss) Allocation:
Limited Partners (1,275,885) 6,779,217 (3,592,200)
General Partner (12,628) 74,656 (39,450)
Net Income (Loss) Per Unit:
Limited Partners (0.07) 1.95 (1.17)
General Partner (0.07) 1.95 (1.17)

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER CAMPBELL L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2003 AND FOR THE PERIOD FROM OCTOBER 1, 2002
(COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 2002

UNITS OF
PARTNERSHIP LIMITED GENERAL
INTEREST PARTNERS PARTNER TOTAL
------------- ----------- --------- -----------
$ $ $

Partners' Capital,
Initial Offering 832,786.300 8,227,863 100,000 8,327,863
Offering of Units 1,216,003.471 11,350,313 120,000 11,470,313
Net loss -- (173,159) (2,277) (175,436)
Redemptions (2,118.644) (20,297) -- (20,297)
------------- ----------- --------- -----------
Partners' Capital,
December 31, 2002 2,046,671.127 19,384,720 217,723 19,602,443
Offering of Units 8,470,100.382 89,106,873 930,000 90,036,873
Net income -- 7,267,734 82,314 7,350,048
Redemptions (526,902.716) (5,661,166) -- (5,661,166)
------------- ----------- --------- -----------
Partners' Capital,
December 31, 2003 9,989,868.793 110,098,161 1,230,037 111,328,198
============= =========== ========= ===========

MORGAN STANLEY CHARTER MSFCM L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

UNITS OF
PARTNERSHIP LIMITED GENERAL
INTEREST PARTNERS PARTNER TOTAL
------------- ----------- --------- -----------
$ $ $

Partners' Capital,
December 31, 2000 2,135,799.634 36,795,254 587,057 37,382,311
Offering of Units 619,493.785 10,799,873 -- 10,799,873
Net loss -- (1,410,776) (19,411) (1,430,187)
Redemptions (249,977.725) (4,352,049) -- (4,352,049)
------------- ----------- --------- -----------
Partners' Capital,
December 31, 2001 2,505,315.694 41,832,302 567,646 42,399,948
Offering of Units 1,650,078.947 33,075,899 200,000 33,275,899
Net income -- 14,239,699 167,727 14,407,426
Redemptions (291,943.370) (5,704,540) -- (5,704,540)
------------- ----------- --------- -----------
Partners' Capital,
December 31, 2002 3,863,451.271 83,443,360 935,373 84,378,733
Offering of Units 5,067,317.039 116,565,731 1,090,000 117,655,731
Net loss -- (16,143,139) (178,939) (16,322,078)
Redemptions (556,666.060) (12,237,846) -- (12,237,846)
------------- ----------- --------- -----------
Partners' Capital,
December 31, 2003 8,374,102.250 171,628,106 1,846,434 173,474,540
============= =========== ========= ===========

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER GRAHAM L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

UNITS OF
PARTNERSHIP LIMITED GENERAL
INTEREST PARTNERS PARTNER TOTAL
-------------- ----------- --------- -----------
$ $ $

Partners' Capital,
December 31, 2000 2,291,643.790 28,446,182 324,976 28,771,158
Offering of Units 1,560,633.916 20,661,938 151,000 20,812,938
Net income -- 3,223,806 34,954 3,258,760
Redemptions (371,731.370) (4,902,088) -- (4,902,088)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2001 3,480,546.336 47,429,838 510,930 47,940,768
Offering of Units 3,256,032.080 52,245,849 450,000 52,695,849
Net income -- 24,356,676 270,342 24,627,018
Redemptions (558,920.184) (8,867,415) -- (8,867,415)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2002 6,177,658.232 115,164,948 1,231,272 116,396,220
Offering of Units 7,061,916.942 143,646,579 1,330,000 144,976,579
Net income -- 26,947,948 297,290 27,245,238
Redemptions (869,013.907) (17,908,245) -- (17,908,245)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2003 12,370,561.267 267,851,230 2,858,562 270,709,792
============== =========== ========= ===========

MORGAN STANLEY CHARTER MILLBURN L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

UNITS OF
PARTNERSHIP LIMITED GENERAL
INTEREST PARTNERS PARTNER TOTAL
------------- ---------- ------- ----------
$ $ $

Partners' Capital,
December 31, 2000 2,864,487.735 29,457,979 324,620 29,782,599
Offering of Units 905,670.879 9,005,536 50,000 9,055,536
Net loss -- (3,592,200) (39,450) (3,631,650)
Redemptions (494,506.218) (4,987,884) -- (4,987,884)
------------- ---------- ------- ----------
Partners' Capital,
December 31, 2001 3,275,652.396 29,883,431 335,170 30,218,601
Offering of Units 1,249,986.726 12,765,966 70,000 12,835,966
Net income -- 6,779,217 74,656 6,853,873
Redemptions (566,455.117) (5,628,599) -- (5,628,599)
------------- ---------- ------- ----------
Partners' Capital,
December 31, 2002 3,959,184.005 43,800,015 479,826 44,279,841
Offering of Units 2,596,025.144 29,901,428 220,000 30,121,428
Net loss -- (1,275,885) (12,628) (1,288,513)
Redemptions (714,993.710) (8,236,758) -- (8,236,758)
------------- ---------- ------- ----------
Partners' Capital,
December 31, 2003 5,840,215.439 64,188,800 687,198 64,875,998
============= ========== ======= ==========

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER CAMPBELL L.P.

STATEMENTS OF CASH FLOWS

FOR THE PERIOD
FROM OCTOBER 1, 2002
FOR THE YEAR (COMMENCEMENT OF
ENDED OPERATIONS) TO
DECEMBER 31, DECEMBER 31,
2003 2002
------------ --------------------
$ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) 7,350,048 (175,436)
Noncash item included in net
income (loss):
Net change in unrealized (4,715,846) (496,687)
Increase in operating assets:
Interest receivable (Morgan
Stanley DW) (57,130) (13,716)
Increase in operating liabilities:
Accrued brokerage fees (Morgan
Stanley DW) 422,526 85,912
Accrued management fees 180,575 35,002
Accrued incentive fee 9,503 --
---------- ----------
Net cash provided by (used for)
operating activities 3,189,676 (564,925)
---------- ----------

CASH FLOWS FROM
FINANCING ACTIVITIES
Initial offering -- 8,327,863
Offering of Units 90,036,873 11,470,313
Increase in subscriptions receivable (5,948,760) (3,827,157)
Increase in redemptions payable 805,654 20,297
Redemptions of Units (5,661,166) (20,297)
---------- ----------
Net cash provided by
financing activities 79,232,601 15,971,019
---------- ----------

Net increase in cash 82,422,277 15,406,094
Balance at beginning of period 15,406,094 --
---------- ----------
Balance at end of period 97,828,371 15,406,094
========== ==========

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER MSFCM L.P.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
2003 2002 2001
----------- ---------- ----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) (16,322,078) 14,407,426 (1,430,187)
Noncash item included in net
income (loss):
Net change in unrealized 655,041 (8,667,368) 4,973,466
(Increase) decrease in operating
assets:
Interest receivable (Morgan
Stanley DW) (43,975) (11,667) 116,097
Increase (decrease) in operating
liabilities:
Accrued brokerage fees (Morgan
Stanley DW) 411,884 175,910 68,395
Accrued management fees
(MSFCM) 141,966 54,797 19,541
Accrued incentive fees (MSFCM) -- -- (205,168)
----------- ---------- ----------
Net cash provided by (used for)
operating activities (15,157,162) 5,959,098 3,542,144
----------- ---------- ----------

CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 117,655,731 33,275,899 10,799,873
Increase in subscriptions receivable (4,899,798) (2,391,248) (1,082,400)
Increase (decrease) in redemptions
payable 2,549,078 (513,072) (141,583)
Redemptions of Units (12,237,846) (5,704,540) (4,352,049)
----------- ---------- ----------
Net cash provided by financing
activities 103,067,165 24,667,039 5,223,841
----------- ---------- ----------

Net increase in cash 87,910,003 30,626,137 8,765,985
Balance at beginning of period 73,899,220 43,273,083 34,507,098
----------- ---------- ----------
Balance at end of period 161,809,223 73,899,220 43,273,083
=========== ========== ==========

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER GRAHAM L.P.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,
------------------------------------
2003 2002 2001
----------- ----------- ----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income 27,245,238 24,627,018 3,258,760
Noncash item included in net
income:
Net change in unrealized (9,253,741) (6,346,817) 2,549,392
(Increase) decrease in operating
assets:
Interest receivable
(Morgan Stanley DW) (82,925) (43,615) 72,477
Increase (decrease) in operating
liabilities:
Accrued brokerage fees
(Morgan Stanley DW) 700,176 305,114 115,492
Accrued management fees 237,569 93,209 32,997
Accrued incentive fees -- -- (860,827)
----------- ----------- ----------
Net cash provided by operating
activities 18,846,317 18,634,909 5,168,291
----------- ----------- ----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 144,976,579 52,695,849 20,812,938
Increase in subscriptions
receivable (8,225,123) (3,352,875) (2,175,483)
Increase (decrease) in redemptions
payable 2,888,421 152,501 (226,515)
Redemptions of Units (17,908,245) (8,867,415) (4,902,088)
----------- ----------- ----------
Net cash provided by financing
activities 121,731,632 40,628,060 13,508,852
----------- ----------- ----------
Net increase in cash 140,577,949 59,262,969 18,677,143
Balance at beginning of period 104,510,473 45,247,504 26,570,361
----------- ----------- ----------
Balance at end of period 245,088,422 104,510,473 45,247,504
=========== =========== ==========

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER MILLBURN L.P.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
2003 2002 2001
---------- ---------- ----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) (1,288,513) 6,853,873 (3,631,650)
Noncash item included in net
income (loss):
Net change in unrealized (1,734,999) (1,206,647) 3,536,111
(Increase) decrease in operating
assets:
Interest receivable (Morgan
Stanley DW) 3,033 (2,156) 95,074
Increase in operating liabilities:
Accrued brokerage fees (Morgan
Stanley DW) 96,557 53,304 19,109
Accrued management fees 36,176 17,585 5,460
---------- ---------- ----------
Net cash provided by (used for)
operating activities (2,887,746) 5,715,959 24,104
---------- ---------- ----------

CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 30,121,428 12,835,966 9,055,536
Increase in subscriptions receivable (1,191,414) (716,397) (409,676)
Increase (decrease) in redemptions
payable 1,335,180 1,428 (354,584)
Redemptions of Units (8,236,758) (5,628,599) (4,987,884)
---------- ---------- ----------
Net cash provided by financing
activities 22,028,436 6,492,398 3,303,392
---------- ---------- ----------

Net increase in cash 19,140,690 12,208,357 3,327,496
Balance at beginning of period 40,616,156 28,407,799 25,080,303
---------- ---------- ----------
Balance at end of period 59,756,846 40,616,156 28,407,799
========== ========== ==========

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER CAMPBELL L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2003 AND 2002

LONG UNREALIZED PERCENTAGE SHORT UNREALIZED PERCENTAGE
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS) OF NET ASSETS
- ------------------------------ --------------- ------------- ---------------- -------------
2003 PARTNERSHIP NET ASSETS: $111,328,198 $ % $ %

Foreign currency 5,860,684 5.26* (2,551,537) (2.29)
Interest rate (45,925) (0.04) (99,252) (0.09)
Equity 1,447,121 1.30 -- --
Commodity 597,104 0.54 -- --
--------- ----- ---------- -----
Grand Total: 7,858,984 7.06 (2,650,789) (2.38)
========= ===== ========== =====
Unrealized Currency Gain

Total Net Unrealized Gain per Statement of
Financial Condition

2002 PARTNERSHIP NET ASSETS: $19,602,443
Foreign currency 1,050,080 5.35* (806,523) (4.11)
Interest rate 212,714 1.09 -- --
Commodity 19,382 0.10 -- --
Equity (8,180) (0.04) 31,175 0.16
--------- ----- ---------- -----
Grand Total: 1,273,996 6.50 (775,348) (3.95)
========= ===== ========== =====
Unrealized Currency Loss

Total Net Unrealized Gain per Statement of
Financial Condition

FUTURES AND FORWARD CONTRACTS: NET UNREALIZED GAIN/(LOSS) # OF CONTRACTS/NOTIONAL AMOUNTS
- ------------------------------ -------------------------- -------------------------------
2003 PARTNERSHIP NET ASSETS: $111,328,198 $

Foreign currency 3,309,147 585,500,000
Interest rate (145,177) 3,248
Equity 1,447,121 716
Commodity 597,104 437
---------
Grand Total: 5,208,195

Unrealized Currency Gain 4,338
---------
Total Net Unrealized Gain per Statement of
Financial Condition 5,212,533
=========
2002 PARTNERSHIP NET ASSETS: $19,602,443
Foreign currency 243,557 706,700,000
Interest rate 212,714 332
Commodity 19,382 172
Equity 22,995 37
---------
Grand Total: 498,648

Unrealized Currency Loss (1,961)
---------
Total Net Unrealized Gain per Statement of
Financial Condition 496,687
=========

* No single contract's value exceeds 5% of Net Assets.

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER MSFCM L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2003 AND 2002

LONG UNREALIZED PERCENTAGE SHORT UNREALIZED PERCENTAGE
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS) OF NET ASSETS
- ------------------------------ --------------- ------------- ---------------- -------------
2003 PARTNERSHIP NET ASSETS: $173,474,540 $ % $ %

Foreign currency 1,100,599 0.63 -- --
Commodity 5,451,831 3.14 -- --
Interest rate (661,987) (0.38) -- --
Equity 1,176,725 0.68 -- --
---------- ----- --------- --------
Grand Total: 7,067,168 4.07 -- --
========== ===== ========= ========
Unrealized Currency Loss

Total Net Unrealized Gain per Statement of
Financial Condition

2002 PARTNERSHIP NET ASSETS: $84,378,733
Foreign currency 7,543,280 8.94* -- --
Interest rate 2,252,650 2.67 -- --
Commodity (2,010,612) (2.38) -- --
---------- ----- --------- --------
Grand Total: 7,785,318 9.23 -- --
========== ===== ========= ========
Unrealized Currency Loss

Total Net Unrealized Gain per Statement of
Financial Condition

FUTURES AND FORWARD CONTRACTS: NET UNREALIZED GAIN/(LOSS) # OF CONTRACTS/ NOTIONAL AMOUNTS
- ------------------------------ -------------------------- --------------------------------
2003 PARTNERSHIP NET ASSETS: $173,474,540 $

Foreign currency 1,100,599 16,319,922,256
Commodity 5,451,831 2,890
Interest rate (661,987) 616
Equity 1,176,725 121
----------
Grand Total: 7,067,168

Unrealized Currency Loss (156,306)
----------
Total Net Unrealized Gain per Statement of
Financial Condition 6,910,862
==========

2002 PARTNERSHIP NET ASSETS: $84,378,733
Foreign currency 7,543,280 4,785,991,256
Interest rate 2,252,650 2,072
Commodity (2,010,612) 1,640
----------
Grand Total: 7,785,318

Unrealized Currency Loss (219,415)
----------
Total Net Unrealized Gain per Statement of
Financial Condition 7,565,903
==========

* No single contract's value exceeds 5% of Net Assets.

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER GRAHAM L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2003 AND 2002

LONG UNREALIZED PERCENTAGE SHORT UNREALIZED PERCENTAGE
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS) OF NET ASSETS
- ------------------------------ --------------- ------------- ---------------- -------------
2003 PARTNERSHIP NET ASSETS: $270,709,792 $ % $ %

Foreign currency 4,816,855 1.78 (1,285,220) (0.47)
Equity 7,631,514 2.82 (262,587) (0.10)
Commodity 6,241,497 2.31 (5,968) (0.01)
Interest rate (290,120) (0.11) -- --
---------- ----- ---------- -----
Grand Total: 18,399,746 6.80 (1,553,775) (0.58)
========== ===== ========== =====
Unrealized Currency Loss

Total Net Unrealized Gain per Statement of
Financial Condition

2002 PARTNERSHIP NET ASSETS: $116,396,220
Foreign currency 4,830,579 4.15 514,624 0.44
Interest rate 2,471,036 2.12 (55,922) (0.06)
Commodity (936,619) (0.80) 497,138 0.43
Equity -- -- 452,280 0.39
---------- ----- ---------- -----
Grand Total: 6,364,996 5.47 1,408,120 1.20
========== ===== ========== =====
Unrealized Currency Loss

Total Net Unrealized Gain per Statement of
Financial Condition

FUTURES AND FORWARD CONTRACTS: NET UNREALIZED GAIN/(LOSS) # OF CONTRACTS/NOTIONAL AMOUNTS
- ------------------------------ -------------------------- -------------------------------
2003 PARTNERSHIP NET ASSETS: $270,709,792 $

Foreign currency 3,531,635 41,972,233
Equity 7,368,927 3,957
Commodity 6,235,529 3,409
Interest rate (290,120) 1,991
----------
Grand Total: 16,845,971

Unrealized Currency Loss (379,305)
----------
Total Net Unrealized Gain per Statement of
Financial Condition 16,466,666
==========

2002 PARTNERSHIP NET ASSETS: $116,396,220
Foreign currency 5,345,203 7,282,618,804
Interest rate 2,415,114 5,116
Commodity (439,481) 3,065
Equity 452,280 455
----------
Grand Total: 7,773,116

Unrealized Currency Loss (560,191)
----------
Total Net Unrealized Gain per Statement of
Financial Condition 7,212,925
==========

The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER MILLBURN L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2003 AND 2002

LONG UNREALIZED PERCENTAGE SHORT UNREALIZED PERCENTAGE
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS) OF NET ASSETS
- ------------------------------ --------------- ------------- ---------------- -------------
2003 PARTNERSHIP NET ASSETS: $64,875,998 $ % $ %

Foreign currency 3,458,602 5.33* (1,122,986) (1.73)
Interest rate 20,495 0.03 (16,194) (0.02)
Commodity 88,962 0.14 (438) --
Equity 301,184 0.46 -- --
--------- ---- ---------- -----
Grand Total: 3,869,243 5.96 (1,139,618) (1.75)
========= ==== ========== =====
Unrealized Currency Gain

Total Net Unrealized Gain per Statement of Financial Condition

2002 PARTNERSHIP NET ASSETS: $44,279,841
Foreign currency 319,174 0.72 (8,396) (0.02)
Interest rate 1,322,639 2.99 -- --
Commodity 584,409 1.32 45,431 0.10
Equity -- -- 127,413 0.29
--------- ---- ---------- -----
Grand Total: 2,226,222 5.03 164,448 0.37
========= ==== ========== =====
Unrealized Currency Gain

Total Net Unrealized Gain per Statement of Financial Condition

FUTURES AND FORWARD CONTRACTS: NET UNREALIZED GAIN # OF CONTRACTS/ NOTIONAL AMOUNTS
- ------------------------------ ------------------- --------------------------------
2003 PARTNERSHIP NET ASSETS: $64,875,998 $

Foreign currency 2,335,616 47,887,540,000
Interest rate 4,301 1,913
Commodity 88,524 736
Equity 301,184 340
---------
Grand Total: 2,729,625

Unrealized Currency Gain 1,646,751
---------
Total Net Unrealized Gain per Statement of Financial Condition 4,376,376
=========

2002 PARTNERSHIP NET ASSETS: $44,279,841
Foreign currency 310,778 17,304,330,000
Interest rate 1,322,639 1,616
Commodity 629,840 779
Equity 127,413 140
---------
Grand Total: 2,390,670

Unrealized Currency Gain 250,707
---------
Total Net Unrealized Gain per Statement of Financial Condition 2,641,377
=========

* No single contract's value exceeds 5% of Net Assets.
The accompanying notes are an integral part of these financial statements.

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION. Morgan Stanley Charter Campbell L.P. ("Charter Campbell"),
Morgan Stanley Charter MSFCM L.P. ("Charter MSFCM"), Morgan Stanley Charter
Graham L.P. ("Charter Graham") and Morgan Stanley Charter Millburn L.P.
("Charter Millburn") (individually, a "Partnership", or collectively, the
"Partnerships") are limited partnerships 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, but not limited to, foreign currencies, financial instruments,
metals, energy and agricultural products (collectively, "futures interests").
The general partner for each Partnership is Demeter Management Corporation
("Demeter"). The non-clearing commodity broker is Morgan Stanley DW Inc.
("Morgan Stanley DW"). The clearing commodity brokers are Morgan Stanley & Co.
Incorporated ("MS&Co.") and Morgan Stanley & Co. International Limited
("MSIL"). The trading advisor for Charter MSFCM is Morgan Stanley Futures
& Currency Management Inc. ("MSFCM"). 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.
Effective July 29, 2002, Charter Campbell was added to the Charter Series and
began trading on October 1, 2002.
Demeter is required to maintain a 1% minimum interest in the equity of each
Partnership and income (losses) are shared by Demeter and the limited partners
based on their proportional ownership interests.

USE OF ESTIMATES. The financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America, which
require management to make estimates and assumptions that affect the reported
amounts in the financial statements and related disclosures. Management
believes that the estimates utilized in the

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

preparation of the financial statements are prudent and reasonable. Actual
results could differ from those estimates.

REVENUE RECOGNITION. Futures interests are open commitments until settlement
date. They are valued at market on a daily basis and the resulting net change
in unrealized gains and losses is reflected in the change in unrealized profit
(loss) on open contracts from one period to the next on the statements of
operations. Monthly, Morgan Stanley DW credits each Partnership with interest
income on 100% of its average daily funds held at Morgan Stanley DW. In
addition, Morgan Stanley DW credits each Partnership with 100% of the interest
income Morgan Stanley DW receives from MS&Co. and MSIL with respect to such
Partnership's assets deposited as margin. The interest rates used are equal to
that earned by Morgan Stanley DW on its U.S. Treasury bill investments. For
purposes of such interest payments, Net Assets do not include monies owed to
the Partnerships on forward contracts and other futures interests.

NET INCOME (LOSS) PER UNIT. Net income (loss) per unit of limited partnership
interest ("Unit(s)") is computed using the weighted average number of Units
outstanding during the period.

CONDENSED SCHEDULES OF INVESTMENTS. In March 2001, the American Institute of
Certified Public Accountants' Accounting Standards Executive Committee ("AICPA
Executive Committee") issued Statement of Position 01-1 ("SOP 01-1") "Amendment
to the Scope of Statement of Position 95-2, Financial Reporting By Nonpublic
Investment Partnerships, to Include Commodity Pools". SOP 01-1 required
commodity pools to include a condensed schedule of investments identifying
those investments which constitute more than 5% of Net Assets, taking long and
short positions into account separately, beginning in fiscal years ending after
December 15, 2001.

In December 2003, the AICPA Executive Committee issued Statement of Position
03-4 ("SOP 03-4") "Reporting Financial Highlights and Schedule of Investments
by Nonregistered Investment Partnerships:

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

An Amendment to the Audit and Accounting Guide Audits Of Investment Companies
and AICPA Statement of Position 95-2, Financial Reporting By Nonpublic
Investment Partnerships". SOP 03-4 requires commodity pools to disclose on the
Schedule of Investments the number of contracts, the contracts' expiration
dates and the cumulative unrealized gains/(losses) on open futures contracts,
when the cumulative unrealized gains/(losses) on an open futures contract
exceeds 5% of Net Assets, taking long and short positions into account
separately. SOP 03-4 also requires ratios for expenses and net income/(losses)
based on average net assets to be disclosed in Financial Highlights. SOP 03-4
is effective for fiscal years ending after December 15, 2003.

EQUITY IN FUTURES INTERESTS TRADING ACCOUNTS. The Partnerships' asset "Equity
in futures interests trading accounts", reflected on the statements of
financial condition, consists of (A) cash on deposit with Morgan Stanley DW,
MS&Co. and MSIL to be used as margin for trading; (B) net unrealized gains or
losses on open contracts, which are valued at market and calculated as the
difference between original contract value and market value; and (C) net option
premiums, which represent the net of all monies paid and/or received for such
option premiums.
The Partnerships, in their normal course of business, enter into various
contracts with MS&Co. and MSIL acting as their commodity brokers. Pursuant to
brokerage agreements with MS&Co. and MSIL, to the extent that such trading
results in unrealized gains or losses, these amounts are offset and reported on
a net basis on the Partnerships' statements of financial condition.
The Partnerships have offset the fair value amounts recognized for forward
contracts executed with the same counterparty as allowable under the terms of
their master netting agreements with MS&Co., the sole counterparty on such
contracts. The Partnerships have consistently applied their right to offset.

BROKERAGE AND RELATED TRANSACTION FEES AND COSTS. Each Partnership pays a
flat-rate monthly brokerage fee of 1/12 of 6.25% of the Partnership's Net

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

Assets as of the first day of each month (a 6.25% annual rate). Such fees
currently cover all brokerage commissions, transaction fees and costs and
ordinary administrative and offering expenses.
Prior to August 1, 2003, each Partnership paid a flat-rate monthly brokerage
fee of 1/12 of 6.75% of the Partnership's Net Assets as of the first day of
each month (a 6.75% annual rate).
Prior to May 1, 2002, each Partnership paid a flat-rate monthly brokerage fee
of 1/12 of 7% of the Partnership's Net Assets as of the first day of each
month (a 7% annual rate).

OPERATING EXPENSES. Each Partnership incurs monthly management fees and may
incur incentive fees. All common administrative and continuing offering
expenses including legal, auditing, accounting, filing fees and other related
expenses are borne by Morgan Stanley DW through the brokerage fees paid by the
Partnerships.
INCOME TAXES. No provision for income taxes has been made in the accompanying
financial statements, as partners are individually responsible for reporting
income or loss based upon their respective share of each Partnership's revenues
and expenses for income tax purposes.

DISTRIBUTIONS. Distributions, other than redemptions of Units, are made on a
pro-rata basis at the sole discretion of Demeter. No distributions have been
made to date.

CONTINUING OFFERING. Units of each Partnership are offered at a price equal to
100% of the Net Asset Value per Unit at monthly closings held as of the last
day of each month. No selling commissions or charges related to the continuing
offering of Units are paid by the limited partners or the Partnerships. Morgan
Stanley DW pays all such costs.

REDEMPTIONS. Limited partners may redeem some or all of their Units as of the
last day of the sixth month following the closing at which a person first
becomes a limited partner. Redemptions may only be made in whole Units, with a
minimum of 100 Units required

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

for each redemption, unless a limited partner is redeeming his entire interest
in a particular Partnership.
Units redeemed on or prior to the last day of the twelfth month from the date
of purchase will be subject to a redemption charge equal to 2% of the Net Asset
Value of a Unit on the Redemption Date. Units redeemed after the last day of
the twelfth month and on or prior to the last day of the twenty-fourth month
from the date of purchase will be subject to a redemption charge equal to 1% of
the Net Asset Value of a Unit on the Redemption Date. Units redeemed after the
last day of the twenty-fourth month from the date of purchase will not be
subject to a redemption charge. The foregoing redemption charges are paid to
Morgan Stanley DW.

EXCHANGES. On the last day of the first month which occurs more than six
months after a person first becomes a limited partner in any of the
Partnerships, and at the end of each month thereafter, limited partners may
transfer their investment among the Partnerships (subject to certain
restrictions outlined in the Limited Partnership Agreements) without paying
additional charges.

DISSOLUTION OF THE PARTNERSHIPS. Charter MSFCM will terminate on December 31,
2025 and Charter Campbell, Charter Graham and Charter Millburn will terminate
on December 31, 2035 or at an earlier date if certain conditions occur as
defined in each Partnership's Limited Partnership Agreement.

LITIGATION SETTLEMENT. On February 27, 2002, Charter MSFCM received
notification of a preliminary entitlement to payment from the Sumitomo Copper
Litigation Settlement Administrator and received payment of this settlement
award in the amount of $292,406 as of August 30, 2002.

- --------------------------------------------------------------------------------
2. RELATED PARTY TRANSACTIONS
Each Partnership pays brokerage fees to Morgan Stanley DW as described in Note
1. Each Partnership's cash is on deposit with Morgan Stanley DW, MS&Co. and
MSIL in futures interests trading accounts to meet

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

margin requirements as needed. Morgan Stanley DW pays interest on these funds
as described in Note 1.

Demeter, on behalf of Charter MSFCM and itself, entered into a management
agreement with MSFCM to make all trading decisions for the Partnership. Charter
MSFCM pays management and incentive fees (if any) to MSFCM.

- --------------------------------------------------------------------------------
3. TRADING ADVISORS
Demeter, on behalf of each Partnership, retains certain commodity trading
advisors to make all trading decisions for the Partnerships. The trading
advisors for each Partnership at December 31, 2003 were as follows:

Morgan Stanley Charter Campbell L.P.
Campbell & Company, Inc.

Morgan Stanley Charter MSFCM L.P.
Morgan Stanley Futures & Currency Management Inc.

Morgan Stanley Charter Graham L.P.
Graham Capital Management, L.P.

Morgan Stanley Charter Millburn L.P.
Millburn Ridgefield Corporation

Compensation to the trading advisors by the Partnerships consists of a
management fee and an incentive fee as follows:

MANAGEMENT FEE. Charter MSFCM, Charter Graham and Charter Millburn each pay
its trading advisor a flat-rate monthly fee equal to 1/12 of 2% (a 2% annual
rate) of the Partnership's Net Assets under management by each trading advisor
as of the first day of each month.
Charter Campbell pays its trading advisor a flat-rate monthly fee equal to
1/12 of 2.65% (a 2.65% annual rate) of the Partnership's Net Assets under
management as of the first day of each month. Prior to August 1, 2003, Charter
Campbell paid a flat-rate monthly fee equal to 1/12 of 2.75% (a 2.75% annual
rate) of the Partnership's Net Assets under management as of the first day of
each month.

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

INCENTIVE FEE. Each Partnership's incentive fee is equal to 20% of trading
profits, paid on a quarterly basis for Charter MSFCM, and paid on a monthly
basis for Charter Campbell, Charter Graham and Charter Millburn.
Trading profits represent the amount by which profits from futures, forwards
and options trading exceed losses after brokerage and management fees are
deducted. When a trading advisor experiences losses with respect to Net Assets
as of the end of a calendar month, or calendar quarter with respect to Charter
MSFCM, the trading advisor must recover such losses before that trading advisor
is eligible for an incentive fee in the future.

- --------------------------------------------------------------------------------
4. FINANCIAL INSTRUMENTS
The Partnerships trade futures contracts, options on futures contracts and
forward contracts on physical commodities and other commodity interests,
including, but not limited to, 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 Partnerships' contracts are accounted for on a trade-date basis and
marked to market on a daily basis. Each Partnership accounts for its derivative
investments in accordance with the provisions of Statement of Financial
Accounting Standards 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:

1) One or more underlying notional amounts or payment provisions;

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

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 at December 31, 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:

CHARTER CAMPBELL

NET UNREALIZED GAINS
ON OPEN CONTRACTS LONGEST MATURITIES
----------------------------- -------------------
OFF- OFF-
EXCHANGE- EXCHANGE- EXCHANGE- EXCHANGE-
YEAR TRADED TRADED TOTAL TRADED TRADED
- ---- --------- --------- --------- --------- ---------
$ $ $

2003 1,903,386 3,309,147 5,212,533 Sep. 2004 Mar. 2004
2002 253,129 243,558 496,687 Sep. 2003 Mar. 2003

CHARTER MSFCM

NET UNREALIZED GAINS
ON OPEN CONTRACTS LONGEST MATURITIES
----------------------------- -------------------
OFF- OFF-
EXCHANGE- EXCHANGE- EXCHANGE- EXCHANGE-
YEAR TRADED TRADED TOTAL TRADED TRADED
- ---- --------- --------- --------- --------- ---------
$ $ $

2003 5,810,267 1,100,595 6,910,862 Mar. 2004 Mar. 2004
2002 22,623 7,543,280 7,565,903 Sep. 2004 Apr. 2003

CHARTER GRAHAM

NET UNREALIZED GAINS/
(LOSSES) ON OPEN CONTRACTS LONGEST MATURITIES
------------------------------- -------------------
OFF- OFF-
EXCHANGE- EXCHANGE- EXCHANGE- EXCHANGE-
YEAR TRADED TRADED TOTAL TRADED TRADED
---- ---------- --------- ---------- --------- ---------
$ $ $

2003 17,018,386 (551,720) 16,466,666 Jun. 2005 Mar. 2004
2002 7,053,639 159,286 7,212,925 Jun. 2004 Mar. 2003

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

CHARTER MILLBURN

NET UNREALIZED GAINS
ON OPEN CONTRACTS LONGEST MATURITIES
----------------------------- -------------------
OFF- OFF-
EXCHANGE- EXCHANGE- EXCHANGE- EXCHANGE-
YEAR TRADED TRADED TOTAL TRADED TRADED
---- --------- --------- --------- --------- ---------
$ $ $

2003 2,040,760 2,335,616 4,376,376 Jun. 2004 Mar. 2004
2002 2,330,599 310,778 2,641,377 Mar. 2003 Mar. 2003

The Partnerships have credit risk associated with counterparty
nonperformance. The credit risk associated with the instruments in which the
Partnerships are involved is limited to the amounts reflected in the
Partnerships' statements of financial condition.
The Partnerships also have 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 Partnerships' 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. Morgan Stanley DW, MS&Co. and
MSIL, each as a futures commission merchant for each Partnership's
exchange-traded futures and futures-styled options contracts, are required,
pursuant to regulations of the Commodity Futures Trading Commission, 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 $99,731,757 and $15,659,223
for Charter Campbell, $167,619,490 and $73,921,843 for Charter MSFCM,
$262,106,808 and $111,564,112 for Charter Graham and $61,797,606 and
$42,946,755 for Charter Millburn at December 31, 2003 and 2002, respectively.
With respect to each Partnership's off-exchange-traded forward currency
contracts, there are no daily exchange-required settlements of variations in
value nor is there any requirement that an amount equal to the net unrealized
gains (losses) on open forward contracts be segregated, however, MS&Co. and
Morgan Stanley DW will make daily settlements of losses as needed.

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

With respect to those off-exchange-traded forward currency contracts, the
Partnerships are at risk to the ability of MS&Co., the sole counterparty on all
such contracts, to perform. Each Partnership has a netting agreement with
MS&Co. These agreements, which seek to reduce both the Partnerships' and
MS&Co.'s exposure on off-exchange-traded forward currency contracts, should
materially decrease the Partnerships' credit risk in the event of MS&Co.'s
bankruptcy or insolvency.

- --------------------------------------------------------------------------------
5. FINANCIAL HIGHLIGHTS

CHARTER CAMPBELL

PER UNIT:
---------

NET ASSET VALUE, JANUARY 1, 2003: $ 9.58
------
NET OPERATING RESULTS:
Realized Profit 1.69
Unrealized Profit 0.79
Interest Income 0.09
Expenses (1.01)
------
Net Income 1.56
------
NET ASSET VALUE, DECEMBER 31, 2003: $11.14
======

Expense Ratio 9.0%
Net Income Ratio 11.0%

TOTAL RETURN 2003 16.3%

INCEPTION-TO-DATE RETURN 11.4%

COMPOUND ANNUALIZED RETURN 9.0%

CHARTER MSFCM

PER UNIT:
---------

NET ASSET VALUE, JANUARY 1, 2003: $ 21.84
--------
NET OPERATING RESULTS:
Realized Profit 1.01
Unrealized Loss (0.11)
Interest Income 0.21
Expenses (2.23)
--------
Net Loss (1.12)
--------
NET ASSET VALUE, DECEMBER 31, 2003: $ 20.72
========

Expense Ratio 9.5%
Net Loss Ratio (11.3)%

TOTAL RETURN 2003 (5.1)%

INCEPTION-TO-DATE RETURN 107.2%

COMPOUND ANNUALIZED RETURN 7.7%

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(concluded)

CHARTER GRAHAM

PER UNIT:
---------

NET ASSET VALUE, JANUARY 1, 2003: $ 18.84
-------
NET OPERATING RESULTS:
Realized Profit 4.03
Unrealized Profit 1.00
Interest Income 0.19
Expenses (2.18)
-------
Net Income 3.04
-------
NET ASSET VALUE, DECEMBER 31, 2003: $ 21.88
=======

Expense Ratio 10.3%
Net Income Ratio 13.9%

TOTAL RETURN 2003 16.1%

INCEPTION-TO-DATE RETURN 118.8%

COMPOUND ANNUALIZED RETURN 17.6%

CHARTER MILLBURN

PER UNIT:
---------

NET ASSET VALUE, JANUARY 1, 2003: $ 11.18
-------
NET OPERATING RESULTS:
Realized Profit 0.52
Unrealized Profit 0.35
Interest Income 0.13
Expenses (1.07)
-------
Net Loss (0.07)
-------
NET ASSET VALUE, DECEMBER 31, 2003: $ 11.11
=======
Expense Ratio 9.1%
Net Loss Ratio (2.2)%

TOTAL RETURN 2003 (0.6)%

INCEPTION-TO-DATE RETURN 11.1%

COMPOUND ANNUALIZED RETURN 2.2%

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