MORGAN STANLEY CHARTER WELTON LP - 10-Q Quarterly Report

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

FORM 10-Q

[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2003 or

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

Commission File Number 0-25607

MORGAN STANLEY CHARTER WELTON L.P.

(Exact name of registrant as specified in its charter)

Delaware 13-4018063
(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

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

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

Yes X No___________

MORGAN STANLEY CHARTER WELTON L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

March 31, 2003

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

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

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

MORGAN STANLEY CHARTER WELTON L.P.
STATEMENTS OF CHANGES IN PARTNERS? CAPITAL
For the Quarters Ended March 31, 2003 and 2002
(Unaudited)

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

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

March 31, 2003

(Unaudited)

The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Charter Welton L.P. (the ?Partnership?). The
financial statements and condensed notes herein should be read in
conjunction with the Partnership?s December 31, 2002 Annual Report
on Form 10-K.

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

Effective December 31, 2002, the Partnership terminated trading
and commenced its dissolution in April 2003 pursuant to its
Limited Partnership Agreement.
MORGAN STANLEY CHARTER WELTON L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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 were 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. Welton Investment Corporation
(the ?Trading Advisor?) was the trading advisor to the
Partnership.

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

3. Financial Instruments
The Partnership traded futures contracts, options on futures
contracts and forward contracts on physical commodities and other
commodity interests, including foreign currencies, financial
instruments, metals, energy and agricultural products. Futures

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

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

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

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

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

MORGAN STANLEY CHARTER WELTON L.P.
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 losses on open contracts, reported as a
component of ?Equity in futures interests trading accounts? on the
statements of financial condition, and their longest contract
maturities were as follows:

Net Unrealized Losses
on Open Contracts Longest Maturities
Exchange- Off-Exchange- Exchange- Off-Exchange-
Date Traded Traded Total Traded Traded
$ $ $

Mar. 31, 2003 (71,763) ? (71,763) Jun. 2003 ?
Dec. 31, 2002 (212,058) ? (212,058) Jun. 2003 ?

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

MORGAN STANLEY CHARTER WELTON L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

The Partnership also has credit risk because Morgan Stanley DW, MS
& Co. and MSIL act as the futures commission merchants or the
counterparties, with respect to most of the Partnership?s assets.
Exchange-traded futures and futures-styled options contracts are
marked to market on a daily basis, with variations in value
settled on a daily basis. Each of Morgan Stanley DW, MS & Co. and
MSIL, as a futures commission merchant for the Partnership?s
exchange-traded futures and futures-styled options contracts, are
required, pursuant to regulations of the Commodity Futures Trading
Commission (?CFTC?), to segregate from their own assets, and for
the sole benefit of their commodity customers, all funds held by
them with respect to exchange-traded futures and futures-styled
options contracts, including an amount equal to the net unrealized
gains on all open futures and futures-styled options contracts,
which funds, in the aggregate, totaled $5,548,232 and $13,612,650
at March 31, 2003 and December 31, 2002, respectively.

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

Liquidity. The Partnership deposited 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 were
used as margin to engage in trading. The assets were held in
either non-interest bearing bank accounts or in securities and
instruments permitted by the CFTC for investment of customer
segregated or secured funds. The Partnership?s assets held by the
commodity brokers were used as margin solely for the Partnership?s
trading.

Investments 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 prompt liquidation of futures or options
contracts.
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 trading in potentially profitable markets or prevent
prompt liquidation of unfavorable positions in such markets,
resulting in substantial losses.

The Partnership never had illiquidity affect a material portion
of its assets. Furthermore, there are no material trends,
demands, commitments, events, or uncertainties known at the
present time that will result in, or that are reasonably likely to
result in, the Partnership?s liquidity increasing or decreasing in
any material way.

Capital Resources. The Partnership did not have any capital
assets. Final redemptions and exchanges out of all remaining
Partnership Units were made in April 2003.

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.
At March 31, 2003, the Partnership had no off-balance sheet
arrangements, nor contractual obligations or commercial
commitments to make future payments that would affect the
Partnership?s liquidity or capital resources. The contracts
traded by the Partnership were accounted for on a trade-date basis
and marked to market on a daily basis. The value of futures
contracts is the settlement price on the exchange on which
that futures contract is traded on a particular day and 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.

Results of Operations
General. The Partnership?s results depended on the Trading
Advisor and the ability of the Trading Advisor?s trading programs
to take advantage of price movements or other profit opportunities
in the futures, forwards and options markets. The following
presents a summary of the Partnership?s operations for the three
month periods ended March 31, 2003 and 2002, and a general
discussion of its trading activities during each period. The
results of operations of the Partnership are difficult to discuss
other than in the context of the Trading Advisor?s trading
activities on behalf of the Partnership and how the Partnership
has performed in the past.

The Partnership?s results of operations set forth in the
financial statements on pages 2 through 10 of this report were
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 traded were accounted for on a trade-
date basis and marked to market on a daily basis. The difference
between their cost and market value was 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 were closed out, and
the sum of these amounts constituted the Partnership?s trading
revenues. Interest income revenue, as well as management fees,
incentive fees and brokerage fees expenses of the Partnership
were 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 used could
reasonably affect reported amounts.

For the Quarter Ended March 31, 2003
For the quarter ended March 31, 2003, the Partnership recorded
interest income of $28,850. There were no trading revenues or
expenses due to cessation of trading effective December 31, 2002.
Net income was $28,850 and the net asset value of a Unit
increased from $7.52 at December 31, 2002 to $7.54 at March 31,
2003.

For the Quarter Ended March 31, 2002
For the quarter ended March 31, 2002, the Partnership recorded
total trading losses, net of interest income, of $933,993 and
posted a decrease in net asset value per Unit. The most
significant losses of approximately 7.2% were recorded in the
currency markets primarily during February from previously
established short positions in the euro when prices strengthened
relative to the U.S. dollar on weak U.S. equity markets and
improving European confidence. Additional losses were recorded
in March when the value of the euro experienced short-term
volatile movements. Slighter losses of approximately 4.1% were
recorded in the global stock index futures markets predominantly
in January from short positions in U.S. stock indices when prices
rallied early in the month behind a stronger than expected
forecast for economic recovery. Additional losses occurred in
February from Hang Seng index futures positions when prices moved
without trend. Losses were partially offset by gains of
approximately 3.5% recorded in the energy markets during March
from previously established long positions in crude oil futures
when prices continued trending higher on supply concerns and
Middle East tensions. Gains of approximately 1.4% were also
recorded in the metals markets principally in February and March
from previously established long positions in gold when prices
trended higher following weak equity markets attributable to
profit warnings, accounting concerns, and Middle East tensions.
Gains of approximately 1.1% were recorded in the global interest
rates futures markets mostly during March from short positions
when German interest rate futures prices fell in response to the
European Central Bank?s decision to leave rates unchanged and
expectations of an accelerated global economic recovery. Total
expenses for the three months ended March 31, 2002 were $350,583,
resulting in a net loss of $1,284,576. The net asset value of a
Unit decreased from $7.13 at December 31, 2001 to $6.57 at
March 31, 2002.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Introduction
The Partnership is a commodity pool that was engaged primarily in
the speculative trading of futures, forwards and options. The
market-sensitive instruments held by the Partnership were acquired
for speculative trading purposes only and, as a result, all or
substantially all of the Partnership?s assets were at risk of
trading loss. Unlike an operating company, the risk of market-
sensitive instruments was central, not incidental, to the
Partnership?s main business activities.

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

The Partnership?s total market risk was influenced by a wide
variety of factors, including the diversification among the
Partnership?s open positions, the volatility present within the
markets, and the liquidity of the markets. At different times,
each of these factors acted to increase or decrease the market
risk associated with the Partnership.
Quantifying the Partnership?s Trading Value at Risk
The following quantitative disclosures regarding the Partnership?s
market risk exposures contain ?forward-looking statements? within
the meaning of the safe harbor from civil liability provided for
such statements by the Private Securities Litigation Reform Act of
1995 (set forth in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934). All
quantitative disclosures in this section are deemed to be forward-
looking statements for purposes of the safe harbor, except for
statements of historical fact.

The Partnership accounted for open positions on the basis of mark-
to-market accounting principles. Any losses in the market value
of the Partnership?s open positions were directly reflected in the
Partnership?s earnings, whether realized or unrealized, and its
cash flow. Profits and losses on open positions of exchange-
traded futures, forwards and options were settled daily through
variation margin.

The Partnership?s risk exposure in the market sectors traded by
the Trading Advisor is estimated below in terms of Value at Risk
(?VaR?). The VaR model used by the Partnership includes many
variables that could change the market value of the Partnership?s
trading portfolio. The Partnership estimated VaR using a model
based upon historical simulation with a confidence level of 99%.
Historical simulation involves constructing a distribution of
hypothetical daily changes in the value of a trading portfolio.
The VaR model takes into account linear exposures to price
and interest rate risk. Market risks that are incorporated in
the VaR model include equity and commodity prices, interest
rates, foreign exchange rates, and correlation among these
variables. The hypothetical changes in portfolio value are based
on daily percentage changes observed in key market indices or
other market factors (?market risk factors?) to which the
portfolio is sensitive. The historical observation period of the
Partner- ship?s VaR is approximately four years. The one-day 99%
confidence level of the Partnership?s VaR corresponds to the
negative change in portfolio value that, based on observed market
risk factors, would have been exceeded once in 100 trading days.
In other words, one-day VaR for a portfolio is a number such that
losses in this portfolio are estimated to exceed the VaR only one
day in 100. VaR typically does not represent the worst case
outcome.

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

The Partnership?s VaR computations were based on the risk
representation of the underlying benchmark for each instrument or
contract and did not distinguish between exchange and non-
exchange-traded instruments and were also not based on exchange-
and/or dealer-based 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 was 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 March 31, 2003 and 2002. The
Partnership?s VaR at March 31, 2003 was zero for all market risk
categories because its open positions consisted of unsettled
London Metals Exchange positions that net to zero value. These
positions carry no variation risk because their settlement price
has been established and cannot change in the future. At March
31, 2003 and 2002, the Partnership?s total capitalization was
approximately $5 million and $15 million, respectively.

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

Interest Rate (0.00)% (3.14)%
Currency (0.00) (2.27)
Equity (0.00) (1.02)
Commodity (0.00) (2.19)
Aggregate Value at Risk (0.00)% (4.31)%

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 above represents the VaR
of the Partnership?s open positions across all the market
categories, and is less than the sum of the VaR(s) for all such
market categories due to the diversification benefit across asset
classes.

The table above represents the VaR of the Partnership?s open
positions at March 31, 2003 and 2002 only and is not necessarily
representative of either the historic risk of an investment in
the Partnership.

The table below supplements the March 31, 2003 VaR by presenting
the Partnership?s high, low and average VaR, as a percentage of
total net assets for the four quarterly reporting periods from
April 1, 2002 through March 31, 2003.

Primary Market Risk Category High Low Average
Interest Rate (3.32)% (0.00)% (1.34)%
Currency (2.63) (0.00) (1.18)
Equity (0.47) (0.00) (0.21)
Commodity (1.72) (0.00) (0.65)
Aggregate Value at Risk (4.59)% (0.00)% (2.03)%

Limitations on Value at Risk as an Assessment of Market Risk
The face value of the market sector instruments held by the
Partnership was typically many times the applicable margin
requirements. Margin requirements generally range between 2% and
15% of contract face value. Additionally, the use of leverage
caused 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 created a ?risk of ruin? not usually found in other
investments. The relative size of the positions held may have
caused 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, gave no indication of
such ?risk of ruin?. In addition, VaR risk measures should be
viewed in light of the methodology?s limitations, which include
the following:

* past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
* changes in portfolio value caused by market movements may
differ from those of the VaR model;
* VaR results reflect past trading positions while future risk
depends on future positions;
* VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
* the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

The VaR tables above present the results of the Partnership?s VaR
for each of the Partnership?s market risk exposures and on an
aggregate basis at March 31, 2003 and 2002 and for the end of the
four quarterly reporting periods from April 1, 2002 through
March 31, 2003.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances not needed for margin. The Partnership did not have any
foreign currency balances at March 31, 2003.

At March 31, 2003, the Partnership?s cash balance at Morgan
Stanley DW was approximately 143% of its total net asset value. A
decline in short-term interest rates will result in a decline in
the Partnership?s cash management income. This cash flow risk is
not considered to be material.

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

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership?s
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership managed 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 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 was the primary trading risk exposure of the
Partnership at March 31, 2003.

Commodity
Metals. The Partnership?s metals exposure at March 31, 2003
was to fluctuations in the price of base metals, such as
aluminum and nickel. Economic forces, supply and demand
inequalities, geopolitical factors and market expectations
influence price movements in these markets.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
At March 31, 2003, there was no non-trading risk exposure because
the Partnership did not have any foreign currency balances.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Advisor, separately, attempted to
manage the risk of the Partnership?s open positions in essentially
the same manner in all market categories traded. Demeter
attempted to manage market exposure by diversifying the
Partnership?s assets among different market sectors and trading
approaches, and monitoring the performance of the Trading Advisor
daily. In addition, the Trading Advisor established
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 4. CONTROLS AND PROCEDURES
(a) As of a date within 90 days of the filing date of this
quarterly 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-14 and
15d-14 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 II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS
None.

Item 2. CHANGES IN SECURITIES AND 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 333-60097).

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 333-91567).

The managing underwriter for the Partnership is Morgan Stanley
DW.

Through March 31, 2003, 4,164,765.765 Units were sold, leaving
4,835,234.235 Units unsold which will ultimately be de-
registered. The aggregate price of the Units sold through March
31, 2003 was $35,788,724. No additional Units were sold since
cessation of trading at December 31, 2002.

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

Item 5. OTHER INFORMATION
Changes in Management. The following changes have been made to
the Board of Directors and Officers of Demeter Management
Corporation, the general partner:

Mr. Anthony J. DeLuca resigned the position of Director of
Demeter.

Mr. Edward C. Oelsner resigned the position of Director of
Demeter.

Mr. Joseph G. Siniscalchi resigned the position of Director of
Demeter.

Mr. Douglas J. Ketterer, age 37, was named a Director of Demeter,
subject to Mr. Ketterer being confirmed as a principal of Demeter
by the National Futures Association. Mr. Ketterer is a Managing
Director and head of the Strategic Solutions Group, which is
comprised of the Global Product Development Group, Financial
Planning, Mutual Fund Advisory Group, Retirement Strategies,
Education Strategies, Gifting Strategies, External Mutual Funds
and the Global Portfolio Analysis and Research Departments. 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.

Mr. Jeffrey S. Swartz, age 36, was named a Director of Demeter,
subject to Mr. Swartz being confirmed as a principal of Demeter
by the National Futures Association. Mr. Swartz is a Managing
Director and Chief Operating Officer of Investor Advisory
Services (?IAS?). 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 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. Mr. Swartz received his
degree in Business Administration from the University of New
Hampshire.

Mr. Jeffrey D. Hahn, Chief Financial Officer of Demeter, was
named a Director of Demeter.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) Exhibits

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 July
29, 2002, filed with the Securities and Exchange
Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933, as amended, on August 12, 2002.
3.02 Certificate of Limited Partnership, dated July 15, 1998,
is incorporated by reference to Exhibit 3.02 of the
Partnership?s Registration Statement on Form S-1 (File
No. 333-60097) 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 Welton L.P.), is
incorporated by reference to Exhibit 3.01 of the
Partnership?s Form 8-K (File No. 0-25607) 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 Welton Investment
Corporation, is incorporated by reference to Exhibit
10.01 of the Partnership?s Quarterly Report on Form 10-Q
(File No. 0-25607) 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 referenced to Exhibit B of the
Partnership?s Prospectus, dated July 29, 2002, filed with
the Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933, as amended,
on August 12, 2002.
10.03 Amended and Restated Escrow Agreement, dated as of
August 31, 2002, among the Partnership, Morgan Stanley
Charter Graham L.P., Morgan Stanley Charter Millburn
L.P., Morgan Stanley Charter MSFCM L.P., Morgan Stanley
DW and JP Morgan Chase Bank.
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. 0-25607) 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. 0-25607) 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. 0-25607) 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. 0-25607) 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 July 29, 2002, filed with
the Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933, as amended,
on August 12, 2002.
10.09 Securities Account Control Agreement among the
Partnership, MS & Co., and Morgan Stanley DW, dated as of
May 1, 2000, is incorporated by reference to Exhibit
10.03 of the Partnership?s Form 8-K (File No. 0-25607)
filed with the Securities and Exchange Commission on
November 6, 2001.
99.01 Certification of President of Demeter Management
Corporation, 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.
99.02 Certification of Chief Financial Officer of Demeter
Management Corporation, 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.

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

SIGNATURE

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

Morgan Stanley Charter Welton L.P.
(Registrant)

By: Demeter Management Corporation
(General Partner)

May 15, 2003 By:/s/ Jeffrey D. Hahn
Jeffrey D. Hahn
Director and Chief Financial Officer

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

CERTIFICATIONS

I, Jeffrey A. Rothman, President of Demeter Management
Corporation, the general partner of the registrant, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the
registrant;

2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
quarterly report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant?s other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during
the period in which this quarterly report is being
prepared;

b) evaluated the effectiveness of the registrant?s disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the
?Evaluation Date?); and

c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;

5. The registrant?s other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant?s auditors and the audit committee of Demeter?s
board of directors (or persons performing the equivalent
function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant?s ability to record, process, summarize and
report financial data and have identified for the
registrant?s auditors any material weaknesses in internal
controls; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant?s internal controls; and

6. The registrant?s other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies
and material weaknesses.

Date: May 15, 2003 /s/Jeffrey A. Rothman
Jeffrey A. Rothman
President,
Demeter Management Corporation,
general partner of the registrant

CERTIFICATIONS
I, Jeffrey D. Hahn, Chief Financial Officer of Demeter Management
Corporation, the general partner of the registrant, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the
registrant;

2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made,
in light of the circumstances under which such statements
were made, not misleading with respect to the period covered
by this quarterly report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant?s other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this quarterly
report is being prepared;

b) evaluated the effectiveness of the registrant?s
disclosure controls and procedures as of a date within 90
days prior to the filing date of this quarterly report
(the ?Evaluation Date?); and

c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;

5. The registrant?s other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant?s auditors and the audit committee of Demeter?s
board of directors (or persons performing the equivalent
function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant?s ability to record, process, summarize and
report financial data and have identified for the
registrant?s auditors any material weaknesses in internal
controls; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant?s internal controls; and

6. The registrant?s other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies
and material weaknesses.

Date: May 15, 2003 /s/Jeffrey D. Hahn
Jeffrey D. Hahn
Chief Financial Officer,
Demeter Management Corporation,
general partner of the registrant

EXHIBIT 99.01
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley Charter
Welton L.P. (the ?Partnership?) on Form 10-Q for the period ended
March 31, 2003 as filed with the Securities and Exchange
Commission on the date hereof (the ?Report?), I, Jeffrey A.
Rothman, President, Demeter Management Corporation, general
partner of the Partnership, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) The Report fully complies with the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Partnership.

By: /s/Jeffrey A. Rothman

Name: Jeffrey A. Rothman
Title: President

Date: May 15, 2003

EXHIBIT 99.02
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley Charter
Welton L.P. (the ?Partnership?) on Form 10-Q for the period ended
March 31, 2003 as filed with the Securities and Exchange
Commission on the date hereof (the ?Report?), I, Jeffrey D. Hahn,
Chief Financial Officer, Demeter Management Corporation, general
partner of the Partnership, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) The Report fully complies with the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Partnership.

By: /s/Jeffrey D. Hahn

Name: Jeffrey D. Hahn
Title: Chief Financial Officer

Date: May 15, 2003

MORGAN STANLEY CHARTER WELTON L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)