MORGAN STANLEY CHARTER CAMPBELL 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, 2004 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 0-50064

MORGAN STANLEY CHARTER CAMPBELL L.P.

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

DELAWARE 01-0710311
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
330 Madison Avenue, 8th Floor
New York, NY 10017
(Address of principal executive offices) (Zip Code)

Registrant?s telephone number, including area code (212) 905-2700

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:
$203,457,188 at June 30, 2004.

DOCUMENTS INCORPORATED BY REFERENCE
(See Page 1)

MORGAN STANLEY CHARTER CAMPBELL L.P.
INDEX TO ANNUAL REPORT ON FORM 10-K
DECEMBER 31, 2004

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
April 28, 2004 I

Partnership?s Supplement to the
Prospectus dated December 16, 2004 I

Annual Report to Morgan Stanley
Charter Series Limited Partners
for the year ended December 31, 2004 II, III, and IV

PART I
Item 1. BUSINESS
(a) General Development of Business. Morgan Stanley Charter Camp-
bell L.P. (the "Partnership") is a Delaware limited partnership
organized in 2002 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 trading operations on October 1, 2002. The
Partnership is one of the Morgan Stanley Charter series of funds,
comprised of the Partnership, Morgan Stanley Charter Graham L.P.,
Morgan Stanley Charter Millburn L.P., and Morgan Stanley Charter
MSFCM L.P. (collectively, the ?Charter Series?).

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. Campbell & Company, Inc. (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, 2004
was $11.58, representing an increase of 3.9 percent from the net
asset value per Unit of $11.14 at December 31, 2003. For a more
detailed description of the Partnership?s business, see
subparagraph (c).

(b) Financial Information about Segments. For financial infor-
mation reporting purposes the Partnership is deemed to engage in
one industry segment, the speculative trading of futures,
forwards, and options on such contracts. 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 April 28, 2004 (the ?Prospectus?) and the
Partnership?s supplement to the Prospectus dated December 16, 2004
(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 Supplement).

2. Futures, Options, and 2. "The Futures, Options, and
Forwards Markets Forwards Markets? (Pages
110?115 of the Prospectus).

3. Partnership's Trading 3. ?Use of Proceeds? (Pages
Arrangements and 24-25 of the Prospectus).
Policies ?The Trading Advisors?
(Pages 62-86 of the
Prospectus and Pages S-26 ?
S-35 of the Supplement).

4. Management of the Part- 4. ?Management Agreements?
nership (Page 62 of the Prospectus).
?The General Partner?
(Pages 56-61 of the
Prospectus and Pages
S-24 ? S-25 of the
Supplement). ?The
Commodity Brokers? (Pages
89-90 of the Prospectus)
and ?The Limited
Partnership Agreements?
(Pages 92-95 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 101?108 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 330 Madison
Avenue, 8th Floor, New York, NY 10017.

Demeter changed its address in August 2004 from 825 Third Avenue,
9th Floor, New York, NY 10022 to 330 Madison Avenue, 8th Floor,
New York, NY 10017.
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, 2004
was approximately 10,778.

(c) Distributions. No distributions have been made by the
Partnership since it commenced trading operations on October 1,
2002. 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?s 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.

The aggregate price of the Units sold through December 31, 2004
was $282,659,603.

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

(f) Use of Proceeds.

SEC
Registration Statement on Form S-1 Units Registered Effective Date File Number

Initial Registration 3,000,000.000 July 29, 2002 333-85078
Additional Registration 18,000,000.000 February 26, 2003 333-103171
Additional Registration 34,000,000.000 April 28, 2004 333-113878
Total Units Registered 55,000,000.000

Units sold through 12/31/04 25,333,798.996
Units unsold through 12/31/04 _29,666,201.004

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)

For the Period
from October 1, 2002
For the Years Ended December 31, (commencement of operations)
2004 2003 to December 31, 2002

Total Trading Results
including interest 24,521,854 13,377,361 107,809

Net Income (Loss) 3,033,128 7,350,048 (175,436)

Net Income (Loss)
Per Unit (Limited
& General Partners) 0.44 1.56 (0.42)

Total Assets 280,775,155 112,887,667 19,743,654

Total Limited
Partners' Capital 272,588,976 110,098,161 19,384,720

Net Asset Value
Per Unit 11.58 11.14 9.58

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
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. Such 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. For the periods covered by
this report, 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 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 expects to
have, any capital assets. Redemptions, exchanges, and sales of
Units in the future will affect the amount of funds available for
investments in futures, forwards, and options in subsequent
periods. It is not possible to estimate the amount, and therefore
the impact, of future inflows and outflows 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.

Off-Balance Sheet Arrangements and Contractual Obligations. 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 program to take
advantage of price movements in the futures, forwards, and options
markets. The following presents a summary of the Partnership's
operations for the years ended December 31, 2004 and 2003, and the
period from October 1, 2002 (commencement of operations) through
December 31, 2002, 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 during the period in
question. Past performance is no guarantee of future results.

The Partnership?s results of operations set forth in the financial
statements are 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 trading profit (loss)?
for open (unrealized) contracts, and recorded as ?Realized trading
profit (loss)? when open positions are closed out. The sum of
these amounts constitutes the Partnership?s trading results. 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. Interest income, as
well as management fees, incentive fees, and brokerage fee
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 total trading results including interest
totaling $24,521,854 and expenses totaling $21,488,726, resulting
in net income of $3,033,128 for the year ended December 31, 2004.
The Partnership?s net asset value per Unit increased from $11.14
at December 31, 2003 to $11.58 at December 31, 2004. Total
redemptions and subscriptions for the year were $14,485,166
and $175,624,554, respectively, and the Partnership?s ending
capital was $275,500,714 at December 31, 2004, an increase of
$164,172,516 from ending capital at December 31, 2003 of
$111,328,198.

The most significant trading gains of approximately 13.8% were
generated in the global interest rate markets, primarily during
February, March, and August, from long positions in European and
U.S. interest rate futures as prices moved higher on speculation
about European and U.S. interest rate policy, uncertainty in the
global equity markets, ?safe-haven? buying amid major geopolitical
concerns, and surging energy prices. Further gains from long
positions in European interest rates were recorded in the fourth
quarter as prices continued to trend higher for the aforementioned
reasons, in addition to the rise in the value of the euro,
which created strong demand for euro-denominated investments.
Additional gains of approximately 2.5% were experienced in the
currency markets during January, February, September, October, and
November from long positions in the New Zealand and Canadian
dollar versus the U.S. dollar as the value of these ?commodity
currencies? strengthened due to higher gold prices and interest
rate hikes by the Reserve Bank of New Zealand and the Bank of
Canada. The widening U.S. Current-Account deficit, concerns for
potential terrorist attacks, and rising oil prices also pulled the
value of the U.S. dollar lower versus these currencies, as well as
against the British pound. The value of the British pound was
bolstered during January, February, and November by looming
expectations for further increases in U.K. interest rates by the
Bank of England. Elsewhere in the currency markets, gains were
accumulated during January and February from short positions in
the Swiss franc relative to the U.S. dollar as the value of the
franc moved lower due to conflicting economic data out of
Switzerland. Long positions in the Swiss franc relative to the
U.S. dollar resulted in additional gains in November as the value
of the U.S. dollar declined due to investor perceptions that the
Bush administration was unlikely to intervene in the currency
markets to strengthen the U.S. dollar. Smaller gains of
approximately 2.2% were recorded in the energy markets, primarily
during February, April, and May, from long futures
positions in crude oil and its related products as prices trended
higher amid fears of potential terrorist attacks on Saudi Arabian
oil facilities, disruptions in Iraqi oil production, falling
inventory levels, and uncertainty regarding production levels from
OPEC. A portion of the Partnership?s overall gains for the year
was offset by losses of approximately 2.0% in the global stock
index markets, primarily during March, from long European stock
index futures positions as equity prices dropped due to terror
attacks in Madrid, worse-than-expected German industrial
production, and weak business confidence data. Further losses
were recorded during July from long positions in European equity
index futures as prices reversed lower early in the month due to
the release of disappointing U.S. employment data, surging energy
prices, and government warnings concerning potential terrorist
attacks. During September, losses continued from long positions
in European equity index futures as rising energy prices,
conflicting economic data, and weak corporate earnings data pulled
prices lower. Elsewhere in the global stock index futures
markets, losses were recorded from positions in Japanese equity
index futures during May, October, and November as prices moved
without consistent direction amid conflicting economic data
regarding a Japanese economic recovery and volatility in the
energy markets. Smaller losses of approximately 0.6% were
incurred in the metals markets from both long and short positions
in nickel futures as prices moved erratically throughout most of
the year amid conflicting news regarding supply and demand and
volatility in the U.S. dollar.

The Partnership recorded total trading results including interest
totaling $13,377,361 and expenses totaling $6,027,313, resulting
in net income of $7,350,048 for the year ended December 31, 2003.
The Partnership?s net asset value per Unit increased from $9.58 at
December 31, 2002 to $11.14 at December 31, 2003. Total
redemptions and subscriptions for the year were $5,661,166 and
$90,036,873, respectively, and the Partnership?s ending capital
was $111,328,198 at December 31, 2003, an increase of $91,725,755
from ending capital at December 31, 2002 of $19,602,443.

The most significant trading gains of approximately 29.1% in the
currency markets 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 of
approximately 5.7% were experienced from long positions in U.S.,
Pacific Rim, and European stock index futures as global equity
prices moved higher throughout a majority of the year due to
continued optimism regarding a global economic recovery. A
portion of the Partnership?s overall gains for the year was
offset by losses of approximately 3.7% recorded 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 and prices then reversed higher
during August and September as renewed fears for an
unsustainable economic recovery resurfaced. Additional losses
of approximately 1.2% were recorded in the energy markets,
primarily during October, as the Partnership 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 Partnership 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
throughout a majority of the month and then unexpectedly
reversed higher after OPEC announced that it would move to
reduce output.

The Partnership recorded total trading results including interest
totaling $107,809 and expenses totaling $283,245, resulting in a
net loss of $175,436 for the period from October 1, 2002
(commencement of operations) to December 31, 2002. The
Partnership?s net asset value per Unit decreased from $10.00 at
October 1, 2002 (commencement of operations) to $9.58 at December
31, 2002. Total redemptions and subscriptions for the period from
October 1, 2002 (commencement of operations) to December 31, 2002
were $20,297 and $11,470,313, respectively, and the Partnership?s
ending capital was $19,602,443 at December 31, 2002, an increase
of $11,274,580 from ending capital at October 1, 2002
(commencement of operations) of $8,327,863.

The most significant trading gains of approximately 2.8% were
recorded in the currency markets from long positions in the euro
and British pound versus the U.S. dollar as the U.S. dollar?s
value weakened amid investors? fears concerning increased global
tensions. A portion of the Partnership?s overall gains was
offset by losses of approximately 4.2% in the energy futures
markets from both long and short positions in crude oil futures
amid price volatility caused by tensions with Iraq and concerns
regarding output from Venezuela. Additional losses were recorded
from long positions in heating oil futures as prices moved lower
during October as geopolitical and weather related concerns
temporarily subsided. Smaller losses of approximately 1.4% were
recorded in the global stock index futures markets from short
positions in European, U.S., and Asian stock index futures as
prices reversed higher during October amid short-lived optimism
regarding an economic recovery.

For an analysis of unrealized gains and (losses) by contract type
and a further description of 2004 trading results, refer to the
Partnership?s Annual Report to Limited Partners for the year ended
December 31, 2004, 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 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. 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 was
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, forward, and options
contracts traded in the United States and most 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 contract?s 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 such 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.

For additional information, see the ?Financial Instruments?
section under ?Notes to Financial Statements? in the Partnership?s
Annual Report to Limited Partners for the year ended December 31,
2004, 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
operation.

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 inherent to the primary business
activity of the Partnership.

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. Gains and losses on open positions of exchange-traded
futures, forwards, and options are settled daily through variation
margin. Gains and losses on off-exchange-traded forward currency
contracts are settled upon termination of the contract, however,
the Partnership is required to meet margin requirements equal to
the net unrealized loss on open contracts in the Partnership
accounts with the counterparty, which is accomplished by daily
maintenance of the cash balance in a custody account held at
Morgan Stanley DW for the benefit of MS & Co.

The Partnership?s total market risk may increase or decrease as
it is 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 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 Partnership?s past performance is no guarantee 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 and use of
leverage may cause future losses and volatility (i.e. ?risk of
ruin?) that far exceed the Partnership?s experiences to date under
the ?Partnership?s Value at Risk in Different Market Sectors?
section and significantly exceed the Value at Risk (?VaR?) tables
disclosed.

Limited partners will not be liable for losses exceeding the
current net asset value of their investment.
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 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, 2004 and 2003. At
December 31, 2004 and 2003, the Partnership?s total capitalization
was approximately $276 million and $111 million, respectively.

Primary Market December 31, 2004 December 31, 2003
Risk Category Value at Risk Value at Risk

Currency (2.21)% (1.75)%

Equity (2.12) (1.23)

Interest Rate (1.29) (1.89)

Commodity (0.40) (0.58)

Aggregate Value at Risk (3.04)% (2.78)%

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, 2004 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, 2004 through December 31, 2004.

Primary Market Risk Category High Low Average

Currency (2.21)% (0.92)% (1.34)%

Equity (2.12) (0.23) (0.85)

Interest Rate (2.25) (0.54) (1.53)

Commodity (0.50) (0.10) (0.28)

Aggregate Value at Risk (3.04)% (1.19)% (2.13)%

Limitations on Value at Risk as an Assessment of Market Risk
VaR models permit estimation of a portfolio?s aggregate market
risk exposure, incorporating a range of varied market risks;
reflect risk reduction due to portfolio diversification or hedging
activities; and can cover a wide range of portfolio assets.
However, VaR risk measures should be viewed in light of the
methodology?s limitations, which include, but may not be limited
to 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 market fluctuations applied to
current 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.

In addition, the VaR tables above, as well as the past
performance of the Partnership, give no indication of the
Partnership?s potential ?risk of ruin?.

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 for the four quarter-end
reporting periods during calendar year 2004. VaR is not
necessarily representative of the Partnership?s 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. These balances and any market risk they may represent
are immaterial.

The Partnership also maintains a substantial portion
(approximately 84% as of December 31, 2004) 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, 2004, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Currency. The primary market exposure of the Partnership at
December 31, 2004 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. At December 31, 2004, the
Partnership?s major exposure was 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 associated
with the Partnership?s currency trades will change
significantly in the future.

Equity. The second largest market exposure of the Partnership
at December 31, 2004 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, 2004, the Partnership?s primary
exposures were to the Euro Stoxx 50 (Europe), S&P 500 (U.S.),
DAX (Germany), NASDAQ (U.S.), IBEX 35 (Spain), and FTSE
(Britain) stock indices. The Partnership is primarily exposed
to the risk of adverse price trends or static markets in the
European and U.S. 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.

Interest Rate. The third largest market exposure of the
Partnership at December 31, 2004 was to the global interest rate
sector. Exposure was primarily spread across the European,
U.S., and Japanese interest rate sectors. Interest rate
movements directly affect the price of the sovereign bond
futures positions held by the Partnership and indirectly affect
the value of its stock index and currency positions.
Interest rate movements in one country, as well as relative
interest rate movements between countries, materially impact the
Partnership?s profitability. The Partnership?s interest rate
exposure is generally to interest rate fluctuations in the U.S.
and the other G-7 countries. Demeter anticipates that the G-7
countries 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, 2004, the Partnership had market
exposure in the energy sector. 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. At December 31, 2004, the Partnership had market
exposure in the metals sector. The Partnership's metals
exposure at December 31, 2004 was to fluctuations in the
price of base metals, such as copper, nickel, and zinc.
Economic forces, supply and demand inequalities,
geopolitical factors, and market expectations influence
price movements in these markets. The Trading Advisor
utilizes the trading system(s) to take positions when
market opportunities develop, and Demeter anticipates that
the Partnership will continue to do so.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at December 31, 2004:

Foreign Currency Balances. The Partnership?s primary
foreign currency balances at December 31, 2004 were in
euros, British pounds, Japanese yen, and Hong Kong dollars.
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 Total Trading Results Net Net Income/
Ended including interest Income/(Loss) (Loss) Per Unit

2004
March 31 $ 24,514,628 $ 17,343,278 $ 1.59
June 30 (16,865,882) (21,004,169) (1.41)
September 30 (3,963,978) (8,724,903) (0.46)
December 31 20,837,086 15,418,922 0.72

Total $ 24,521,854 $ 3,033,128 $ 0.44

2003
March 31 $ 2,545,855 $ 1,269,308 $ 0.81
June 30 2,760,196 1,596,059 0.40
September 30 (1,267,036) (2,835,540) (0.48)
December 31 9,338,346 7,320,221 0.83

Total $ 13,377,361 $ 7,350,048 $ 1.56

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 Demeter, the
general partner of the Partnership, 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 material changes during the period covered
by this annual report in the Partnership?s internal controls
or in other factors that could significantly affect these
controls subsequent to the date of their evaluation.

Management?s Report on Internal Control Over Financial Reporting
Demeter is responsible for the management of the Partnership.

Management of Demeter (?Management?) is responsible for
establishing and maintaining adequate internal control over
financial reporting. The internal control over financial
reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles.

The Partnership?s internal control over financial reporting
includes those policies and procedures that:

* Pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Partnership;

* Provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that the Partnership?s transactions are being made only in
accordance with authorizations of Management and directors;
and

* Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of
the Partnership?s assets that could have a material effect on
the financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the
Partnership?s internal control over financial reporting as of
December 31, 2004. In making this assessment, Management used
the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control-
Integrated Framework. Based on our assessment and those
criteria, Management believes that the Partnership maintained
effective internal control over financial reporting as of
December 31, 2004.

Deloitte & Touche LLP, the Partnership?s independent registered
public accounting firm, has issued an audit report on Management?s
assessment of the Partnership?s internal control over financial
reporting and on the effectiveness of the Partnership?s internal
control over financial reporting. This report, which expresses
unqualified opinions on Management?s assessment and on the
effectiveness of the Partnership?s internal control over financial
reporting, appears under ?Report of Independent Registered Public
Accounting Firm? in the Partnership?s Annual Report to Limited
Partners for the year ended December 31, 2004.

Item 9B. OTHER INFORMATION
The Board of Directors of Demeter, the general partner of the
registrant, approved the engagement of Ernst & Young LLP as the
registrant?s principal accountant for tax purposes. Ernst & Young
LLP was engaged by the registrant on November 1, 2004. Deloitte &
Touche LLP will continue as the registrant?s principal
accountant and audit the financial statements of the registrant.

There have been no material disagreements with Deloitte & Touche
LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.

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:

Mr. Jeffrey D. Hahn resigned his position as Chief Financial
Officer and Director of Demeter.

Mr. Jeffrey S. Swartz resigned his position as a Director of
Demeter.

Mr. Jeffrey A. Rothman, age 43, is the Chairman of the Board of
Directors and President of Demeter. Mr. Rothman is the Managing
Director of Morgan Stanley Managed Futures, responsible for
overseeing all aspects of the firm?s managed futures department.
Mr. Rothman has been with the managed futures department for
eighteen years. Throughout his career, Mr. Rothman has helped
with the development, marketing, and administration of
approximately 40 commodity pools. Mr. Rothman is an active member
of the Managed Funds Association and has recently served on its
Board of Directors. Mr. Rothman has a B.A. degree in
Liberal Arts from Brooklyn College, New York.

Mr. Richard A. Beech, age 53, 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.

Mr. Raymond A. Harris, age 48, is a Director of Demeter. Mr.
Harris is currently Managing Director and head of Client Solutions
for Morgan Stanley Individual Investor Group (?IIG?), a Board
Member of Morgan Stanley DW Inc., and Director of Morgan Stanley
Trust. 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.

Mr. Frank Zafran, age 50, is a Director of Demeter. 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.

Mr. Douglas J. Ketterer, age 39, is a Director of Demeter. Mr.
Ketterer is a Managing Director and has had responsibility for
managing a number of departments at Morgan Stanley over the years,
most recently as head of the Investment Solutions Group, which is
comprised of a number of departments which offer products and
services through Morgan Stanley?s IIG (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.

Mr. Todd Taylor, age 42, is a Director of Demeter. Mr. Taylor
began his career with Morgan Stanley in June 1987 as a Financial
Advisor in the Dallas office. In 1995, he joined the Management
Training Program in New York and was appointed Branch Manager of
the Missouri and southern Illinois branch offices in 1997. Three
years later, in 2000, Mr. Taylor was appointed to a newly created
position, Director of IIG Learning and Development, before
becoming the Director of IIG Strategy in 2002. Most recently, Mr.
Taylor has taken on a new role as the High Net Worth Segment
Director. Mr. Taylor graduated from Texas Tech University
with a B.B.A. in Finance.

Mr. William D. Seugling, age 35, is a Director of Demeter. Mr.
Seugling is a Managing Director at Morgan Stanley and currently
serves as Director of Client Solutions for U.S. Private Wealth
Management. Mr. Seugling joined Morgan Stanley in June 1993 as
an Associate in Equity Structured Products having previously
worked in research and consulting for Greenwich Associates from
October 1991 to June 1993. Since 1994, he has focused broadly
on analysis and solutions for wealthy individuals and families
culminating in his current role within the division. He was
named Vice President in 1996 and an Executive Director in 1999.
Mr. Seugling graduated cum laude from Bucknell University with a
B.S. in Management and a concentration in Chemistry.

Ms. Louise M. Wasso-Jonikas, age 51, is a Director of Demeter.
Ms. Wasso-Jonikas is a Managing Director of Morgan Stanley and
the Director of Alternative Investments for the IIG of Morgan
Stanley. Ms. Wasso-Jonikas was Co-Founder, President, and Chief
Operating Officer of Graystone Partners, an objective consulting
firm, from 1993 to 1999, when Graystone was acquired by Morgan
Stanley. Prior to founding Graystone, Ms. Wasso-Jonikas was a
Senior Vice President at Bessemer Trust and opened their Chicago
office. She also was a Vice President at the Northern
Trust in their Wealth Management Services Group where she worked
exclusively with their largest private clients and family
offices throughout the U.S. and abroad, serving their broad
investment and custody needs. Ms. Wasso-Jonikas also worked as
an equity block trader with Goldman Sachs and with Morgan
Stanley advising and managing money for private clients. Ms.
Wasso-Jonikas? focus is on developing a robust external manager
platform utilizing alternative managers for Morgan Stanley?s IIG
private clients as well as overseeing some of the Morgan
Stanley?s largest client relationships. Ms. Wasso-Jonikas holds
a B.A. in Economics from Mount Holyoke College and an M.B.A in
Finance from the University of Chicago Graduate School of
Business.

Mr. Kevin Perry, age 35, is the Chief Financial Officer of
Demeter. Mr. Perry currently serves as an Executive Director
and Controller within the IIG at Morgan Stanley. Mr. Perry
joined Morgan Stanley in October 2000 and is also Chief
Financial Officer of Morgan Stanley Trust National Association,
Van Kampen Funds Inc., and Morgan Stanley Distribution, Inc.
Prior to joining Morgan Stanley, Mr. Perry worked as an auditor
and consultant in the financial services practice of Ernst &
Young LLP from October 1991 to October 2000. Mr. Perry received
a B.S. degree in Accounting from the University of Notre
Dame in 1991 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. 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. Kevin Perry is the audit committee financial
expert.

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 http://www.morganstanley.com/ourcommitment/
codeofconduct.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, 2004, 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, 2004,
Demeter owned 251,405.283 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, 2004, 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 $12,094,851 for the year ended December 31,
2004.

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, 2004.

(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 year ended December 31, 2004 were approximately $33,050 and
for the year ended December 31, 2003 were $34,882.

(2) Audit-Related Fees. There were no fees for assurance and
related services rendered by Deloitte & Touche LLP for the years
ended December 31, 2004 and 2003.

(3) Tax Fees. The aggregate fees for tax compliance services
rendered by Ernst & Young LLP were approximately $30,446 and
Deloitte & Touche LLP were $29,559 for the years ended December
31, 2004 and 2003, 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 Ernst & Young LLP and Deloitte &
Touche LLP must be directly pre-approved by the Board of Directors
of Demeter. Additionally, all services provided by Deloitte &
Touche LLP are borne by Morgan Stanley through the brokerage fees
paid by the Partnership. Such services must be directly pre-
approved by Morgan Stanley?s Audit Director and Principal
Accounting Officer. All services provided by Ernst & Young LLP
must be communicated to Morgan Stanley?s Audit Director.
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
registered public accounting firm, all appearing in the
accompanying Annual Report to Limited Partners for the year ended
December 31, 2004, are incorporated by reference to Exhibit 13.01
of this Form 10-K:
- - Report of Deloitte & Touche LLP, independent registered public
accounting firm, for the years ended December 31, 2004, 2003,
and the period from October 1, 2002 (commencement of
operations) to December 31, 2002.

- - Statements of Financial Condition, including the Schedules of
Investments, as of December 31, 2004 and 2003.

- - Statements of Operations, Changes in Partners' Capital, and Cash
Flows for the years ended December 31, 2004, 2003, and the
period from October 1, 2002 (commencement of operations) to
December 31, 2002.

- - 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, 2004 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.

(c) Exhibits
Refer to Exhibit Index on Page E-1 ? 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 CAMPBELL L.P.
(Registrant)

BY: Demeter Management Corporation,
General Partner

March 31, 2005 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 31, 2005
Jeffrey A. Rothman, President

/s/ Richard A. Beech March 31, 2005
Richard A. Beech, Director

/s/ Raymond A. Harris March 31, 2005
Raymond A. Harris, Director

/s/ Frank Zafran March 31, 2005
Frank Zafran, Director

/s/ Douglas J. Ketterer March 31, 2005
Douglas J. Ketterer, Director

/s/ Todd Taylor March 31, 2005
Todd Taylor, Director

/s/ William D. Seugling March 31, 2005
William D. Seugling, Director

/s/ Louise M. Wasso-Jonikas March 31, 2005
Louise M. Wasso-Jonikas, Director

/s/ Kevin Perry March 31, 2005
Kevin Perry, Chief Financial Officer

EXHIBIT INDEX

ITEM
3.01 Form of Amended and Restated Limited Partnership
Agreement, by and among Demeter Management Corporation and
the Limited Partners, dated March 26, 2002, is
incorporated by reference to Exhibit A of the
Partnership's Prospectus, dated April 28, 2004, filed with
the Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933, as amended, on
May 4, 2004.
3.02 Certificate of Limited Partnership of the Partnership,
dated March 26, 2002, is incorporated by reference to
Exhibit 3.02 of the Partnership's Registration Statement
on Form S-1 (File No. 333-85078) filed with the Securities
and Exchange Commission on March 28, 2002.
10.01 Management Agreement, among the Partnership, Demeter
Management Corporation, and Campbell & Company, Inc.,
dated September 30, 2002, is incorporated by reference to
Exhibit 10.01 of the Partnership's Registration Statement
on Form S-1 (File No. 333-103171) filed with the
Securities and Exchange Commission on February 13, 2003.
10.02 Form of Subscription and Exchange Agreement and Power of
Attorney to be executed by purchasers of Units is
incorporated by reference to Exhibit B of the
Partnership?s Prospectus, dated April 28, 2004, filed with
the Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933, as amended, on
May 4, 2004.
10.03 Form of Subscription Agreement Update Form to be executed
by purchasers of Units is incorporated by reference to
Exhibit C of the Partnership?s Prospectus, dated April 28,
2004, filed with the Securities and Exchange Commission
pursuant to Rule 424(b)(3) under the Securities Act of
1933, as amended, on May 4, 2004.

10.04 Amended and Restated Escrow Agreement among the Partner-
ship, Morgan Stanley Charter Graham L.P., Morgan Stanley
Charter Millburn L.P., Morgan Stanley Charter Welton L.P.,
Morgan Stanley Charter MSFCM L.P., Morgan Stanley DW Inc.,
and JP Morgan Chase Bank, as escrow agent, dated August
31, 2002, is incorporated by reference to Exhibit 10.04 of
the Partnership?s Registration Statement on Form S-1 (File
No. 333-103171) filed with the Securities and Exchange
Commission on February 13, 2003.
10.05 Customer Agreement between the Partnership and Morgan
Stanley DW Inc., dated September 30, 2002, is incorporated
by reference to Exhibit 10.05 of the Partnership?s
Registration Statement on Form S-1 (File No. 333-103171)
filed with the Securities and Exchange Commission of
February 13, 2003.
10.06 Customer Agreement, among the Partnership, Morgan Stanley
& Co. Incorporated, and Morgan Stanley DW Inc., dated
September 30, 2002, is incorporated by reference to
Exhibit 10.06 of the Partnership?s Registration Statement
on Form S-1 (File No. 333-103171) filed with the
Securities and Exchange Commission on February 13, 2003.
10.07 Customer Agreement, between the Partnership and Morgan
Stanley & Co. International Limited, dated September 30,
2002, is incorporated by reference to Exhibit 10.07 of the
Partnership?s Registration Statement on Form S-1 (File No.
333-103171) filed with the Securities and Exchange
Commission on February 13, 2003.
10.08 Foreign Exchange and Options Master Agreement, between the
Partnership and Morgan Stanley & Co. Incorporated, dated
August 31, 2002, is incorporated by reference to Exhibit
10.08 of the Partnership?s Quarterly Report on Form 10-Q
(File No. 0-50064) filed with the Securities and Exchange
Commission on May 14, 2003.
10.09 Securities Account Control Agreement among the
Partnership, Morgan Stanley & Co. Incorporated, and Morgan
Stanley DW Inc., dated September 30, 2002, is incorporated
by reference to Exhibit 10.09 of the Partnership?s
Registration Statement on Form S-1 (File No. 333-103171)
filed with the Securities and Exchange Commission on
February 13, 2003.

13.01 December 31, 2004 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 Section 302 of the Sarbanes-Oxley Act of 2002.
31.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership 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.

Morgan Stanley
Charter Series

December 31, 2004
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 no
guarantee of future results.

INCEPTION- COMPOUND
TO-DATE ANNUALIZED
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 RETURN RETURN
FUND % % % % % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------------

Charter Campbell -- -- -- -- -- -- -- -- (4.2) 16.3 3.9 15.8 6.7
(3 mos.)
- ---------------------------------------------------------------------------------------------------------------
Charter MSFCM... (7.3) 21.9 4.0 26.2 5.1 (9.2) 23.8 (3.3) 29.1 (5.1) (5.6) 95.6 6.4
(10 mos.)
- ---------------------------------------------------------------------------------------------------------------
Charter Graham.. -- -- -- -- -- 2.9 22.0 9.7 36.8 16.1 1.3 121.6 14.6
(10 mos.)
- ---------------------------------------------------------------------------------------------------------------
Charter Millburn -- -- -- -- -- (7.2) 12.1 (11.3) 21.1 (0.6) (5.3) 5.2 0.9
(10 mos.)
- ---------------------------------------------------------------------------------------------------------------

DEMETER MANAGEMENT CORPORATION

330 Madison Avenue, 8th Floor
New York, NY 10017
Telephone (212) 905-2700

MORGAN STANLEY CHARTER SERIES
ANNUAL REPORT
2004

Dear Limited Partner:
This marks the third annual report for Morgan Stanley Charter Campbell L.P.,
the eleventh annual report for Morgan Stanley Charter MSFCM L.P., and the sixth
annual report for Morgan Stanley Charter Graham L.P. and Morgan Stanley Charter
Millburn L.P. The Net Asset Value per Unit for each of the four Charter Series
Funds ("Fund(s)") as of December 31, 2004 was as follows:

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

Charter Campbell $11.58 3.9%
--------------------------------
Charter MSFCM $19.56 -5.6%
--------------------------------
Charter Graham $22.16 1.3%
--------------------------------
Charter Millburn $10.52 -5.3%
--------------------------------

Since its inception in October 2002, Charter Campbell has increased by 15.8%
(a compound annualized return of 6.7%). Since its inception in March 1994,
Charter MSFCM has increased by 95.6% (a compound annualized return of 6.4%).
Since their inception in March 1999, Charter Graham has increased by 121.6% (a
compound annualized return of 14.6%) and Charter Millburn has increased by 5.2%
(a compound annualized return of 0.9%).

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 charts indicate 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, 330 Madison Avenue, 8th Floor, New
York, NY 10017 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 of the Board of Directors 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.

This page intentionally left blank.

CHARTER CAMPBELL

[CHART]

Year ended December 31, 2004
----------------------------
Currencies 2.50%
Interest Rates 13.80%
Stock Indices -1.99%
Energies 2.22%
Metals -0.61%

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

FACTORS INFLUENCING ANNUAL TRADING GAINS:
.. The most significant gains were generated in the global interest rate
markets, primarily during February, March, and August, from long positions
in European and U.S. interest rate futures as prices moved higher on
speculation about European and U.S. interest rate policy, uncertainty in the
global equity markets, "safe-haven" buying amid major geopolitical concerns,
and surging energy prices. Further gains from long positions in European
interest rates were recorded in the fourth quarter as prices continued to
trend higher for the aforementioned reasons, in addition to the rise in the
value of the euro, which created strong demand for euro-denominated
investments.

.. Additional gains were experienced in the currency markets during January,
February, September, October, and November from long positions in the New
Zealand and Canadian dollar versus the U.S. dollar as the value of these
"commodity currencies" strengthened due to higher gold prices and interest
rate hikes by the Reserve Bank of New Zealand and the Bank of Canada. The
widening U.S. Current-Account deficit, concerns for potential terrorist
attacks, and rising oil prices also pulled the value of the U.S. dollar
lower versus these currencies, as well as against the British pound. The
value of the British pound was bolstered during January, February, and
November by looming expectations for further increases in U.K. interest
rates by the

CHARTER CAMPBELL

Bank of England. Elsewhere in the currency markets, gains were accumulated
during January and February from short positions in the Swiss franc relative
to the U.S. dollar as the value of the franc moved lower due to conflicting
economic data out of Switzerland. Long positions in the Swiss franc relative
to the U.S. dollar resulted in additional gains in November as the value of
the U.S. dollar declined due to investor perceptions that the Bush
administration was unlikely to intervene in the currency markets to
strengthen the U.S. dollar.

.. Smaller gains were recorded in the energy markets, primarily during
February, April, and May, from long futures positions in crude oil and its
related products as prices trended higher amid fears of potential terrorist
attacks on Saudi Arabian oil facilities, disruptions in Iraqi oil
production, falling inventory levels, and uncertainty regarding production
levels from OPEC.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
.. Losses were incurred in the global stock index markets, primarily during
March, from long European stock index futures positions as equity prices
dropped due to terror attacks in Madrid, worse-than-expected German
industrial production, and weak business confidence data. Further losses
were recorded during July from long positions in European equity index
futures as prices reversed lower early in the month due to the release of
disappointing U.S. employment data, surging energy prices, and government
warnings concerning potential terrorist attacks. During September, losses
continued from long positions in European equity index futures as rising
energy prices, conflicting economic data, and weak corporate earnings data
pulled prices lower. Elsewhere in the global stock index futures markets,
losses were recorded from positions in Japanese equity index futures during
May, October, and November as prices moved without consistent direction amid
conflicting economic data regarding a Japanese economic recovery and
volatility in the energy markets.

.. Smaller losses were incurred in the metals markets from both long and short
positions in nickel futures as prices moved erratically throughout most of
the year amid conflicting news regarding supply and demand and volatility in
the U.S. dollar.

CHARTER MSFCM

[CHART]

Year ended December 31, 2004
----------------------------
Currencies -11.87%
Interest Rates 8.87%
Stock Indices 1.83%
Energies 7.30%
Metals -3.00%

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

FACTORS INFLUENCING ANNUAL TRADING GAINS:
.. Gains were experienced in the global interest rate futures markets from long
positions in European interest rate futures during February, March, August,
and September as prices trended higher on uncertainty in the global equity
markets, disappointing economic data, "safe-haven" buying amid major
geopolitical concerns, and a surge in oil prices. Further gains from long
positions in European interest rate futures were recorded in the fourth
quarter as prices continued to trend higher for the aforementioned reasons,
in addition to the rise in the value of the euro, which created strong
demand for euro-denominated investments.

.. Additional gains were experienced in the energy markets. During February,
May, July, September, and October, long positions in crude oil profited as
prices trended higher due to consistent news of tight supply, continuing
geopolitical concerns in the Middle East, concerns that top Russian oil
producer, Yukos, may break up or stop selling oil, major production
disruptions in the Gulf of Mexico, growing civil unrest in Nigeria, and the
threat of a national strike in Norway. In December, smaller gains in the
energy markets resulted from newly established short positions in crude oil
as prices declined on news of a full recovery in production within the Gulf
of Mexico, increased output from OPEC, warmer weather in the U.S., and
reports of abundant supply.

.. Smaller gains were recorded in the global stock index futures markets,
primarily during December, from long positions in

CHARTER MSFCM

Australian equity index futures as prices moved higher on positive investor
sentiment and speculation that interest rates in that country would remain at
current levels throughout 2005. Elsewhere in the global stock index markets,
gains were recorded during December from long positions in Hang Seng stock
index futures as equity prices in Hong Kong moved higher due to strong
earnings from the technology sector and optimism that the Japanese economy
was finally in full recovery and may, thereby, boost the entire Asian region.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
.. In the currency markets, losses were recorded from positions in the Japanese
yen versus the U.S. dollar. These losses were experienced primarily during
the first and second quarter from both long and short positions in the yen
relative to the U.S. dollar as the value of the yen experienced significant
short-term price volatility. Conflicting economic data regarding a Japanese
economic recovery, uncertainty regarding currency market interventions by
the Bank of Japan, geopolitical concerns stemming from instability in Iraq,
and uncertainty regarding the direction of U.S. and Japanese interest rates
contributed to the yen's trendless movement. Losses were also recorded from
positions in the Singapore dollar against the U.S. dollar as the value of
the Singapore dollar experienced significant "whipsawing" during the first
and second quarter in tandem with the value of the Japanese yen. The price
volatility in the Japanese yen also resulted in losses from cross-rate
positions in the euro versus the Japanese yen for the aforementioned
reasons. In the third quarter, volatility in the euro was responsible for
losses in euro/Japanese yen cross-rate positions as the value of the euro
moved in a trendless pattern throughout the quarter due to higher energy
prices and uncertainty about the direction of the European economy. Finally,
losses were recorded from long positions in the British pound relative to
the euro, primarily during December, as the value of the pound reversed
lower following news that the Bank of England was considering an interest
rate cut and the release of weaker-than-expected British economic data.

.. In the metals markets, losses were incurred, primarily during April and
December, from long futures positions in gold as prices weakened due to
strength in the U.S. dollar and stronger-than-expected economic data as
demand for the "safe-haven" asset was reduced. Elsewhere in the metals
markets, losses were recorded, primarily during July and September, from
short positions in nickel futures as base metals prices increased on
continued demand from China and reports of lower-than-expected inventories.
Smaller losses were experienced during December from both long and short
positions in nickel futures as prices moved without consistent direction due
to volatility in the currency markets and conflicting news regarding supply
and demand.

CHARTER GRAHAM

[CHART]

Year ended December 31, 2004
----------------------------
Currencies 0.28%
Interest Rates 4.78%
Stock Indices -1.70%
Energies 5.36%
Metals 0.27%
Agriculturals 1.67%

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

FACTORS INFLUENCING ANNUAL TRADING GAINS:
.. The most significant gains were recorded in the energy markets. During much
of the year, long positions in crude oil and its related products behaved
well as prices trended higher due to consistent news of tight supply,
continuing geopolitical concerns in the Middle East, concerns that top
Russian oil producer, Yukos, may break up or stop selling oil, major
production disruptions in the Gulf of Mexico, growing civil unrest in
Nigeria, and the threat of a national strike in Norway.

.. Additional gains were experienced in the global interest rate futures
markets from long positions in European interest rate futures during
February, March, August, and September as prices rallied on uncertainty in
the global equity markets, disappointing economic data, "safe-haven" buying
amid major geopolitical concerns, and a surge in oil prices. Further gains
from long positions in European interest rates were recorded in the fourth
quarter as prices continued to trend higher for the aforementioned reasons,
in addition to the rise in the value of the euro, which created strong
demand for euro-denominated investments.

CHARTER GRAHAM

.. In the agricultural markets, gains were recorded during January, March, and
June from long positions in corn futures as prices increased on news of
strong demand from Asia. Further gains were experienced during July and
August from short positions in corn futures as prices weakened due to ideal
weather conditions in the growing regions of the U.S. Midwest, reports of
increased inventories, and weaker export demand. Elsewhere in this complex,
gains were recorded from short positions in cotton futures, primarily during
March, April, June, and July, as prices trended lower amid rising supplies
and news of a consistent decline in demand from China.

.. In the currency markets, relatively smaller gains were experienced during
January, February, September, October, and November from long positions in
the New Zealand dollar, Canadian dollar and Australian dollar versus the
U.S. dollar as the value of these "commodity currencies" strengthened due to
higher gold prices and interest rate hikes by the Reserve Bank of New
Zealand and the Bank of Canada. The widening U.S. Current-Account deficit,
concerns for potential terrorist attacks, and rising oil prices also pulled
the value of the U.S. dollar lower versus these currencies, as well as
versus the euro throughout much of the year, resulting in further gains.
Elsewhere in the currency markets, gains were experienced during January and
February from short positions in the Swiss franc relative to the U.S. dollar
as the value of the franc moved lower due to conflicting economic data out
of Switzerland. Long positions in the Swiss franc relative to the U.S.
dollar resulted in additional gains in November as the value of the U.S.
dollar declined when investors concluded that the Bush administration was
unlikely to intervene in the currency markets to strengthen the U.S. dollar.

.. Relatively smaller gains were generated in the metals markets, primarily
during the first and fourth quarter, from long futures positions in copper
and aluminum as prices trended higher in response to greater demand from
Asia driven by a declining U.S. dollar.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
.. Losses were incurred in the global stock index futures markets during March,
May, July, August, and September from positions in European equity index
futures as prices moved without consistent direction due to conflicting
economic data, volatility in energy prices, and significant geopolitical
concerns. Additional losses were incurred from positions in U.S. equity
index futures, particularly the Russell 2000 Index, as prices moved in a
trendless pattern for the aforementioned reasons.

CHARTER MILLBURN

[CHART]

Year ended December 31, 2004
----------------------------
Currencies -3.14%
Interest Rates 2.67%
Stock Indices -2.42%
Energies 2.38%
Metals -0.33%
Agriculturals 0.55%

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

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
.. In the currency markets, losses were experienced from positions in the
Japanese yen versus the U.S. dollar. These losses were experienced
throughout the year from both long and short positions in the yen relative
to the U.S. dollar and the euro as the value of the yen experienced
significant short-term price volatility due to conflicting economic data
regarding a Japanese economic recovery, uncertainty regarding currency
market interventions by the Bank of Japan, geopolitical concerns stemming
from terror warnings and instability in Iraq, and speculation regarding the
direction of U.S. and Japanese interest rates. Losses were also recorded
from positions in the Singapore dollar against the U.S. dollar, primarily
during the first and second quarter, as the value of the Singapore dollar
experienced significant "whipsawing" in tandem with the value of the
Japanese yen. Elsewhere in the currency markets, losses were recorded from
positions in the euro versus the U.S. dollar, primarily during the first
quarter, as well as during July and August, as the value of the euro also
moved in a trendless pattern due to conflicting economic data and volatility
in oil prices.

.. Within the global stock index markets, losses were incurred during April,
May, and July from long positions in European equity index futures as prices
drifted lower amid the continuing instability in Iraq, fears of global
terrorism, and concerns of higher interest rates. Additional losses were

CHARTER MILLBURN

recorded from positions in Pacific Rim equity index futures as prices moved
without consistent direction for the aforementioned reasons, in addition to
inconsistent earnings in the technology sector, conflicting news regarding a
full recovery for Japan's economy, and volatility in the energy markets.

.. Smaller losses were experienced in the metals markets from long futures
positions in gold as precious metals prices weakened due to the sudden
strength in the U.S. dollar during April.

FACTORS INFLUENCING ANNUAL TRADING GAINS:
.. Gains were experienced in global interest rate futures markets from long
positions in European interest rate futures during February, March, August,
and September as prices rallied on uncertainty in the global equity markets,
disappointing economic data, "safe-haven" buying amid major geopolitical
concerns, and a surge in oil prices. Further gains from long positions in
European interest rates were recorded in the fourth quarter as prices
continued to trend higher for the aforementioned reasons, in addition to the
rise in the value of the euro.

.. Additional gains were experienced in the energy markets. Long positions in
crude oil and its related products profited as prices trended higher
throughout a majority of the year due to consistent news of tight supply,
continuing geopolitical concerns in the Middle East, concerns that top
Russian oil producer, Yukos, may break up or stop selling oil, major
production disruptions in the Gulf of Mexico, growing civil unrest in
Nigeria, and the threat of a national strike in Norway.

.. Smaller gains were generated in the agricultural markets during March from
long positions in corn futures as prices increased on news of strong demand
from Asia. Further gains were experienced during July and August from short
positions in corn futures as prices weakened due to ideal weather conditions
in the growing regions of the U.S. Midwest, reports of increased
inventories, and weaker export demand.

MORGAN STANLEY CHARTER SERIES

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Demeter Management Corporation ("Demeter"), 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.
(collectively, the "Partnerships"), is responsible for the management of the
Partnerships.

Management of Demeter ("Management") is responsible for establishing and
maintaining adequate internal control over financial reporting. The internal
control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally
accepted accounting principles.

The Partnerships' internal control over financial reporting includes those
policies and procedures that:

.. Pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the
Partnerships;

.. Provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally
accepted accounting principles, and that the Partnerships' transactions are
being made only in accordance with authorizations of Management and
directors; and

.. Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Partnerships' assets
that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstate-ments. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or proce-dures may deteriorate.

Management assessed the effectiveness of each Partnership's internal control
over financial reporting as of December 31, 2004. In making this assessment,
Management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control--Integrated
Framework. Based on our assessment and those criteria, Management believes that
each Partnership maintained effective internal control over financial reporting
as of December 31, 2004.

Deloitte & Touche LLP, the Partnerships' independent registered public
accounting firm, has issued an audit report on Management's assessment of the
Partnerships' internal control over financial reporting and on the
effectiveness of the Partnerships' internal control over financial reporting.
This report, which expresses unqualified opinions on Management's assessment
and on the effectiveness of the Partnerships' internal control over financial
reporting, appears under "Report of Independent Registered Public Accounting
Firm" on the following page.

New York, New York
March 11, 2005

MORGAN STANLEY CHARTER SERIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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 management's assessment, included in the accompanying
Management's Report on Internal Control Over Financial Reporting, that 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") maintained effective internal control over
financial reporting as of December 31, 2004, based on criteria established in
Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. The Partnerships' management is
responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial
reporting. Our responsibility is to express an opinion on management's
assessment and an opinion on the effectiveness of the Partnerships' internal
control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal
control over financial reporting, evaluating management's assessment, testing
and evaluating the design and operating effectiveness of internal control, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinions.

A company's internal control over financial reporting is a process designed
by, or under the supervision of, the company's principal executive and
principal financial officers, or persons performing similar functions, and
effected by the company's board of directors, management, and other personnel
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company's internal
control over financial reporting includes those

policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company's assets that could have a
material effect on the financial statements.

Because of the inherent limitations of internal control over financial
reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of
the effectiveness of the internal control over financial reporting to future
periods are subject to the risk that the controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

In our opinion, management's assessment that the Partnerships maintained
effective internal control over financial reporting as of December 31, 2004, is
fairly stated, in all material respects, based on the criteria established in
Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Also in our opinion, the Partnerships
maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2004, based on the criteria established in
Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the financial statements as of and
for the year ended December 31, 2004 of the Partnerships and our report dated
March 11, 2005 expressed an unqualified opinion on those financial statements.

Deloitte & Touche LLP

New York, New York
March 11, 2005

MORGAN STANLEY CHARTER SERIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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 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"), including the schedules of investments, as
of December 31, 2004 and 2003, 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, 2004 for Morgan Stanley Charter MSFCM L.P., Morgan
Stanley Charter Graham L.P., and Morgan Stanley Charter Millburn L.P., and for
the years ended December 31, 2004 and 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 the standards of the Public
Company Accounting Oversight Board (United States). 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. at December 31,

2004 and 2003, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2004 for Morgan
Stanley Charter MSFCM L.P., Morgan Stanley Charter Graham L.P., and Morgan
Stanley Charter Millburn L.P., and for the years ended December 31, 2004 and
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.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of the
Partnerships' internal control over financial reporting as of December 31,
2004, based on the criteria established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 11, 2005 expressed an unqualified opinion
on management's assessment of the effectiveness of the Partnerships' internal
control over financial reporting and an unqualified opinion on the
effectiveness of the Partnerships' internal control over financial reporting.

Deloitte & Touche LLP

New York, New York
March 11, 2005

MORGAN STANLEY CHARTER CAMPBELL L.P.

STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31,
------------------------
2004 2003
----------- -----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 267,002,332 97,828,371

Net unrealized gain (loss) on open contracts (MSIL) (91,713) 144,170
Net unrealized gain (loss) on open contracts
(MS&Co.) (905,509) 5,068,363
----------- -----------
Total net unrealized gain (loss) on open contracts (997,222) 5,212,533
----------- -----------
Total Trading Equity 266,005,110 103,040,904
Subscriptions receivable 14,332,785 9,775,917
Interest receivable (Morgan Stanley DW) 437,260 70,846
----------- -----------
Total Assets 280,775,155 112,887,667
=========== ===========

LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 3,320,046 825,951
Accrued brokerage fees (Morgan Stanley DW) 1,372,469 508,438
Accrued management fees 581,926 215,577
Accrued incentive fee -- 9,503
----------- -----------
Total Liabilities 5,274,441 1,559,469
----------- -----------
PARTNERS' CAPITAL
Limited Partners (23,535,882.766 and
9,879,493.243 Units, respectively) 272,588,976 110,098,161
General Partner (251,405.283 and
110,375.550 Units, respectively) 2,911,738 1,230,037
----------- -----------
Total Partners' Capital 275,500,714 111,328,198
----------- -----------
Total Liabilities and Partners' Capital 280,775,155 112,887,667
=========== ===========
NET ASSET VALUE PER UNIT 11.58 11.14
=========== ===========

STATEMENTS OF OPERATIONS

FOR THE PERIOD FROM
OCTOBER 1, 2002
(COMMENCEMENT OF
FOR THE YEARS ENDED OPERATIONS) TO
DECEMBER 31, DECEMBER 31,
----------------------- -------------------
2004 2003 2002
----------- ---------- -------------------
$ $ $

INVESTMENT INCOME
Interest income (Morgan Stanley DW) 2,467,486 522,737 35,475
----------- ---------- --------
EXPENSES
Brokerage fees (Morgan Stanley DW) 12,094,851 3,807,406 201,253
Management fees 5,128,216 1,586,956 81,992
Incentive fees 4,265,659 632,951 --
----------- ---------- --------
Total Expenses 21,488,726 6,027,313 283,245
----------- ---------- --------
NET INVESTMENT LOSS (19,021,240) (5,504,576) (247,770)
----------- ---------- --------
TRADING RESULTS
Trading profit (loss):
Realized 28,264,123 8,138,778 (424,353)
Net change in unrealized (6,209,755) 4,715,846 496,687
----------- ---------- --------
Total Trading Results 22,054,368 12,854,624 72,334
----------- ---------- --------
NET INCOME (LOSS) 3,033,128 7,350,048 (175,436)
=========== ========== ========
NET INCOME (LOSS) ALLOCATION:
Limited Partners 3,001,427 7,267,734 (173,159)
General Partner 31,701 82,314 (2,277)
NET INCOME (LOSS) PER UNIT:
Limited Partners 0.44 1.56 (0.42)
General Partner 0.44 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,
------------------------
2004 2003
----------- -----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 213,442,730 161,809,223

Net unrealized gain on open contracts (MS&Co.) 13,483,848 3,139,491
Net unrealized gain (loss) on open contracts (MSIL) (460,130) 3,771,371
----------- -----------
Total net unrealized gain on open contracts 13,023,718 6,910,862
----------- -----------
Total Trading Equity 226,466,448 168,720,085
Subscriptions receivable 5,099,306 8,566,805
Interest receivable (Morgan Stanley DW) 344,686 122,459
----------- -----------
Total Assets 231,910,440 177,409,349
=========== ===========

LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 4,737,970 2,825,203
Accrued brokerage fees (Morgan Stanley DW) 1,129,383 840,610
Accrued management fees (MSFCM) 361,403 268,996
----------- -----------
Total Liabilities 6,228,756 3,934,809
----------- -----------
PARTNERS' CAPITAL
Limited Partners (11,410,826.848 and
8,284,969.696 Units, respectively) 223,240,153 171,628,106
General Partner (124,797.841 and
89,132.554 Units, respectively) 2,441,531 1,846,434
----------- -----------
Total Partners' Capital 225,681,684 173,474,540
----------- -----------
Total Liabilities and Partners' Capital 231,910,440 177,409,349
=========== ===========
NET ASSET VALUE PER UNIT 19.56 20.72
=========== ===========

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,
------------------------------------
2004 2003 2002
----------- ----------- ----------
$ $ $

INVESTMENT INCOME
Interest income (Morgan Stanley DW) 2,427,231 1,305,055 937,878
----------- ----------- ----------

EXPENSES
Brokerage fees (Morgan Stanley DW) 12,088,626 8,960,530 3,858,279
Management fees (MSFCM) 3,868,362 2,752,466 1,132,395
Incentive fees (MSFCM) -- 2,010,766 2,582,720
----------- ----------- ----------
Total Expenses 15,956,988 13,723,762 7,573,394
----------- ----------- ----------

NET INVESTMENT LOSS (13,529,757) (12,418,707) (6,635,516)
----------- ----------- ----------

TRADING RESULTS
Trading profit (loss):
Realized (2,374,993) (3,248,330) 12,083,168
Net change in unrealized 6,112,856 (655,041) 8,667,368
----------- ----------- ----------
3,737,863 (3,903,371) 20,750,536
Proceeds from Litigation Settlement 2,880 -- 292,406
----------- ----------- ----------
Total Trading Results 3,740,743 (3,903,371) 21,042,942
----------- ----------- ----------

NET INCOME (LOSS) (9,789,014) (16,322,078) 14,407,426
=========== =========== ==========

NET INCOME (LOSS) ALLOCATION:
Limited Partners (9,674,111) (16,143,139) 14,239,699
General Partner (114,903) (178,939) 167,727

NET INCOME (LOSS) PER UNIT:
Limited Partners (1.16) (1.12) 4.92
General Partner (1.16) (1.12) 4.92

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

MORGAN STANLEY CHARTER GRAHAM L.P.

STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31,
------------------------
2004 2003
----------- -----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 469,228,886 245,088,422

Net unrealized gain on open contracts (MS&Co.) 372,464 9,532,167
Net unrealized gain (loss) on open contracts
(MSIL) (132,550) 6,934,499
----------- -----------
Total net unrealized gain on open contracts 239,914 16,466,666
----------- -----------
Total Trading Equity 469,468,800 261,555,088
Subscriptions receivable 15,265,122 14,005,999
Interest receivable (Morgan Stanley DW) 778,963 196,094
----------- -----------
Total Assets 485,512,885 275,757,181
=========== ===========

LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 5,991,320 3,370,668
Accrued brokerage fees (Morgan Stanley DW) 2,336,127 1,270,243
Accrued management fees 747,560 406,478
----------- -----------
Total Liabilities 9,075,007 5,047,389
----------- -----------
PARTNERS' CAPITAL
Limited Partners (21,265,535.495 and
12,239,934.203 Units, respectively) 471,290,914 267,851,230
General Partner (232,240.705 and
130,627.064 Units, respectively) 5,146,964 2,858,562
----------- -----------
Total Partners' Capital 476,437,878 270,709,792
----------- -----------
Total Liabilities and Partners' Capital 485,512,885 275,757,181
=========== ===========
NET ASSET VALUE PER UNIT 22.16 21.88
=========== ===========

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,
------------------------------------
2004 2003 2002
----------- ----------- ----------
$ $ $

INVESTMENT INCOME
Interest income (Morgan Stanley DW) 4,414,059 1,799,417 1,164,347
----------- ----------- ----------

EXPENSES
Brokerage fees (Morgan Stanley DW) 22,233,723 11,874,342 4,751,864
Management fees 7,114,792 3,651,522 1,395,472
Incentive fees 5,135,381 4,657,891 3,660,660
----------- ----------- ----------
Total Expenses 34,483,896 20,183,755 9,807,996
----------- ----------- ----------

NET INVESTMENT LOSS (30,069,837) (18,384,338) (8,643,649)
----------- ----------- ----------

TRADING RESULTS
Trading profit (loss):
Realized 58,748,074 36,375,835 26,923,850
Net change in unrealized (16,226,752) 9,253,741 6,346,817
----------- ----------- ----------
Total Trading Results 42,521,322 45,629,576 33,270,667
----------- ----------- ----------

NET INCOME 12,451,485 27,245,238 24,627,018
=========== =========== ==========

NET INCOME ALLOCATION:
Limited Partners 12,333,083 26,947,948 24,356,676
General Partner 118,402 297,290 270,342

NET INCOME PER UNIT:
Limited Partners 0.28 3.04 5.07
General Partner 0.28 3.04 5.07

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

MORGAN STANLEY CHARTER MILLBURN L.P.

STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31,
---------------------
2004 2003
---------- ----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 58,204,901 59,756,846

Net unrealized gain on open contracts (MS&Co.) 3,182,764 4,376,376
Net unrealized gain on open contracts (MSIL) 114,741 --
---------- ----------
Total net unrealized gain on open contracts 3,297,505 4,376,376
---------- ----------
Total Trading Equity 61,502,406 64,133,222
Subscriptions receivable 1,100,388 2,719,812
Interest receivable (Morgan Stanley DW) 92,043 45,599
---------- ----------
Total Assets 62,694,837 66,898,633
========== ==========

LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 1,689,928 1,601,321
Accrued brokerage fees (Morgan Stanley DW) 315,431 319,177
Accrued management fees 100,938 102,137
---------- ----------
Total Liabilities 2,106,297 2,022,635
---------- ----------
PARTNERS' CAPITAL
Limited Partners (5,693,351.324 and
5,778,353.071 Units, respectively) 59,881,786 64,188,800
General Partner (67,195.701 and
61,862.368 Units, respectively) 706,754 687,198
---------- ----------
Total Partners' Capital 60,588,540 64,875,998
---------- ----------
Total Liabilities and Partners' Capital 62,694,837 66,898,633
========== ==========
NET ASSET VALUE PER UNIT 10.52 11.11
========== ==========

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
2004 2003 2002
---------- ---------- ----------
$ $ $

INVESTMENT INCOME
Interest income (Morgan Stanley DW) 727,529 629,921 603,947
---------- ---------- ----------

EXPENSES
Brokerage fees (Morgan Stanley DW) 3,804,604 3,658,103 2,355,852
Management fees 1,217,473 1,122,424 690,564
Incentive fees -- 476,219 99,341
---------- ---------- ----------
Total Expenses 5,022,077 5,256,746 3,145,757
---------- ---------- ----------

NET INVESTMENT LOSS (4,294,548) (4,626,825) (2,541,810)
---------- ---------- ----------

TRADING RESULTS
Trading profit (loss):
Realized 913,379 1,603,313 8,189,036
Net change in unrealized (1,078,871) 1,734,999 1,206,647
---------- ---------- ----------
Total Trading Results (165,492) 3,338,312 9,395,683
---------- ---------- ----------

NET INCOME (LOSS) (4,460,040) (1,288,513) 6,853,873
========== ========== ==========

NET INCOME (LOSS) ALLOCATION:
Limited Partners (4,419,596) (1,275,885) 6,779,217
General Partner (40,444) (12,628) 74,656

NET INCOME (LOSS) PER UNIT:
Limited Partners (0.59) (0.07) 1.95
General Partner (0.59) (0.07) 1.95

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 YEARS ENDED DECEMBER 31, 2004 AND 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
Offering of Units 15,066,314.126 173,974,554 1,650,000 175,624,554
Net income -- 3,001,427 31,701 3,033,128
Redemptions (1,268,894.870) (14,485,166) -- (14,485,166)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2004 23,787,288.049 272,588,976 2,911,738 275,500,714
============== =========== ========= ===========

MORGAN STANLEY CHARTER MSFCM L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002

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

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
Offering of Units 4,820,781.793 91,495,743 710,000 92,205,743
Net loss -- (9,674,111) (114,903) (9,789,014)
Redemptions (1,659,259.354) (30,209,585) -- (30,209,585)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2004 11,535,624.689 223,240,153 2,441,531 225,681,684
============== =========== ========= ===========

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, 2004, 2003, AND 2002

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

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
Offering of Units 10,495,671.792 219,363,280 2,170,000 221,533,280
Net income -- 12,333,083 118,402 12,451,485
Redemptions (1,368,456.859) (28,256,679) -- (28,256,679)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2004 21,497,776.200 471,290,914 5,146,964 476,437,878
============== =========== ========= ===========

MORGAN STANLEY CHARTER MILLBURN L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002

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

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
Offering of Units 2,031,792.936 21,322,002 60,000 21,382,002
Net loss -- (4,419,596) (40,444) (4,460,040)
Redemptions (2,111,461.350) (21,209,420) -- (21,209,420)
-------------- ----------- ------- -----------
Partners' Capital,
December 31, 2004 5,760,547.025 59,881,786 706,754 60,588,540
============== =========== ======= ===========

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
(COMMENCEMENT OF
FOR THE YEARS ENDED OPERATIONS) TO
DECEMBER 31, DECEMBER 31,
----------------------- --------------------
2004 2003 2002
----------- ---------- --------------------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) 3,033,128 7,350,048 (175,436)
Noncash item included in
net income (loss):
Net change in unrealized 6,209,755 (4,715,846) (496,687)
Increase in operating assets:
Interest receivable
(Morgan Stanley DW) (366,414) (57,130) (13,716)
Increase (decrease) in
operating liabilities:
Accrued brokerage
fees (Morgan Stanley
DW) 864,031 422,526 85,912
Accrued management
fees 366,349 180,575 35,002
Accrued incentive fees (9,503) 9,503 --
----------- ---------- ----------
Net cash provided by (used
for) operating activities 10,097,346 3,189,676 (564,925)
----------- ---------- ----------

CASH FLOWS FROM
FINANCING ACTIVITIES
Initial offering -- -- 8,327,863
Offering of Units 175,624,554 90,036,873 11,470,313
Increase in subscriptions
receivable (4,556,868) (5,948,760) (3,827,157)
Increase in redemptions
payable 2,494,095 805,654 20,297
Redemptions of Units (14,485,166) (5,661,166) (20,297)
----------- ---------- ----------
Net cash provided by
financing activities 159,076,615 79,232,601 15,971,019
----------- ---------- ----------

Net increase in cash 169,173,961 82,422,277 15,406,094
Balance at beginning of
period 97,828,371 15,406,094 --
----------- ---------- ----------

Balance at end of period 267,002,332 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,
------------------------------------
2004 2003 2002
----------- ----------- ----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) (9,789,014) (16,322,078) 14,407,426
Noncash item included in net
income (loss):
Net change in unrealized (6,112,856) 655,041 (8,667,368)
Increase in operating assets:
Interest receivable
(Morgan Stanley DW) (222,227) (43,975) (11,667)
Increase in operating liabilities:
Accrued brokerage fees
(Morgan Stanley DW) 288,773 411,884 175,910
Accrued management fees
(MSFCM) 92,407 141,966 54,797
----------- ----------- ----------
Net cash provided by (used for)
operating activities (15,742,917) (15,157,162) 5,959,098
----------- ----------- ----------

CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 92,205,743 117,655,731 33,275,899
(Increase) decrease in subscriptions
receivable 3,467,499 (4,899,798) (2,391,248)
Increase (decrease) in redemptions
payable 1,912,767 2,549,078 (513,072)
Redemptions of Units (30,209,585) (12,237,846) (5,704,540)
----------- ----------- ----------
Net cash provided by financing
activities 67,376,424 103,067,165 24,667,039
----------- ----------- ----------

Net increase in cash 51,633,507 87,910,003 30,626,137
Balance at beginning of period 161,809,223 73,899,220 43,273,083
----------- ----------- ----------

Balance at end of period 213,442,730 161,809,223 73,899,220
=========== =========== ==========

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,
-------------------------------------
2004 2003 2002
----------- ----------- -----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income 12,451,485 27,245,238 24,627,018
Noncash item included in net
income:
Net change in unrealized 16,226,752 (9,253,741) (6,346,817)
Increase in operating assets:
Interest receivable
(Morgan Stanley DW) (582,869) (82,925) (43,615)
Increase in operating liabilities:
Accrued brokerage fees
(Morgan Stanley DW) 1,065,884 700,176 305,114
Accrued management fees 341,082 237,569 93,209
----------- ----------- -----------
Net cash provided by operating
activities 29,502,334 18,846,317 18,634,909
----------- ----------- -----------

CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 221,533,280 144,976,579 52,695,849
Increase in subscriptions receivable (1,259,123) (8,225,123) (3,352,875)
Increase in redemptions payable 2,620,652 2,888,421 152,501
Redemptions of Units (28,256,679) (17,908,245) (8,867,415)
----------- ----------- -----------
Net cash provided by financing
activities 194,638,130 121,731,632 40,628,060
----------- ----------- -----------

Net increase in cash 224,140,464 140,577,949 59,262,969
Balance at beginning of period 245,088,422 104,510,473 45,247,504
----------- ----------- -----------

Balance at end of period 469,228,886 245,088,422 104,510,473
=========== =========== ===========

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,
-----------------------------------
2004 2003 2002
----------- ---------- ----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) (4,460,040) (1,288,513) 6,853,873
Noncash item included in net
income (loss):
Net change in unrealized 1,078,871 (1,734,999) (1,206,647)
(Increase) decrease in operating
assets:
Interest receivable
(Morgan Stanley DW) (46,444) 3,033 (2,156)
Increase (decrease) in operating
liabilities:
Accrued brokerage fees
(Morgan Stanley DW) (3,746) 96,557 53,304
Accrued management fees (1,199) 36,176 17,585
----------- ---------- ----------
Net cash provided by (used for)
operating activities (3,432,558) (2,887,746) 5,715,959
----------- ---------- ----------

CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 21,382,002 30,121,428 12,835,966
(Increase) decrease in subscriptions
receivable 1,619,424 (1,191,414) (716,397)
Increase in redemptions payable 88,607 1,335,180 1,428
Redemptions of Units (21,209,420) (8,236,758) (5,628,599)
----------- ---------- ----------
Net cash provided by financing
activities 1,880,613 22,028,436 6,492,398
----------- ---------- ----------

Net increase (decrease) in cash (1,551,945) 19,140,690 12,208,357
Balance at beginning of period 59,756,846 40,616,156 28,407,799
----------- ---------- ----------

Balance at end of period 58,204,901 59,756,846 40,616,156
=========== ========== ==========

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

MORGAN STANLEY CHARTER CAMPBELL L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2004 AND 2003

LONG UNREALIZED PERCENTAGE SHORT UNREALIZED PERCENTAGE
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS) OF NET ASSETS
- ------------------------------ --------------- ------------- ---------------- -------------
2004 PARTNERSHIP NET ASSETS: $275,500,714 $ % $ %

Commodity (559,611) (0.20) -- --
Equity 1,898,546 0.69 -- --
Foreign currency (1,727,800) (0.63) (3,015,578) (1.09)
Interest rate 2,000,017 0.72 452,692 0.16
---------- ----- ---------- -----
Grand Total: 1,611,152 0.58 (2,562,886) (0.93)
========== ===== ========== =====
Unrealized Currency Loss

Total Net Unrealized Loss per Statement of Financial Condition

2003 PARTNERSHIP NET ASSETS: $111,328,198
Commodity 597,104 0.54 -- --
Equity 1,447,121 1.30 -- --
Foreign currency 5,860,684 5.26* (2,551,537) (2.29)
Interest rate (45,925) (0.04) (99,252) (0.09)
---------- ----- ---------- -----
Grand Total: 7,858,984 7.06 (2,650,789) (2.38)
========== ===== ========== =====
Unrealized Currency Gain

Total Net Unrealized Gain per Statement of Financial Condition

NET UNREALIZED
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS)
- ------------------------------ --------------
2004 PARTNERSHIP NET ASSETS: $275,500,714 $

Commodity (559,611)
Equity 1,898,546
Foreign currency (4,743,378)
Interest rate 2,452,709
----------
Grand Total: (951,734)

Unrealized Currency Loss (45,488)
----------
Total Net Unrealized Loss per Statement of Financial Condition (997,222)
==========
2003 PARTNERSHIP NET ASSETS: $111,328,198
Commodity 597,104
Equity 1,447,121
Foreign currency 3,309,147
Interest rate (145,177)
----------
Grand Total: 5,208,195

Unrealized Currency Gain 4,338
----------
Total Net Unrealized Gain per Statement of Financial Condition 5,212,533
==========

* Nosingle 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, 2004 AND 2003

LONG UNREALIZED PERCENTAGE SHORT UNREALIZED PERCENTAGE NET UNREALIZED
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS)
- ------------------------------ --------------- ------------- ---------------- ------------- --------------
2004 PARTNERSHIP NET ASSETS: $225,681,684 $ % $ % $

Commodity 1,491,833 0.66 (1,169,823) (0.52) 322,010
Equity 3,573,003 1.58 -- -- 3,573,003
Foreign currency 8,362,854 3.71 -- -- 8,362,854
Interest rate 613,394 0.27 486,725 0.22 1,100,119
---------- ----- ---------- ----- ----------
Grand Total: 14,041,084 6.22 (683,098) (0.30) 13,357,986
========== ===== ========== =====
Unrealized Currency Loss (334,268)
----------
Total Net Unrealized Gain per Statement of
Financial Condition 13,023,718
==========
2003 PARTNERSHIP NET ASSETS: $173,474,540
Commodity 5,451,831 3.14 -- -- 5,451,831
Equity 1,176,725 0.68 -- -- 1,176,725
Foreign currency 1,100,599 0.63 -- -- 1,100,599
Interest rate (661,987) (0.38) -- -- (661,987)
---------- ----- ---------- ----- ----------
Grand Total: 7,067,168 4.07 -- -- 7,067,168
========== ===== ========== =====
Unrealized Currency Loss (156,306)
----------
Total Net Unrealized Gain per Statement of
Financial Condition 6,910,862
==========

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

MORGAN STANLEY CHARTER GRAHAM L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2004 AND 2003

LONG UNREALIZED PERCENTAGE SHORT UNREALIZED PERCENTAGE NET UNREALIZED
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS)
- ------------------------------ --------------- ------------- ---------------- ------------- --------------

2004 PARTNERSHIP NET ASSETS: $476,437,878 $ % $ % $

Commodity (757,683) (0.16) 852,477 0.18 94,794
Equity 8,942,281 1.88 -- -- 8,942,281
Foreign currency (5,479,156) (1.15) (2,287,245) (0.48) (7,766,401)
Interest rate 2,408,876 0.50 443,338 0.09 2,852,214
---------- ----- ---------- ----- ----------
Grand Total: 5,114,318 1.07 (991,430) (0.21) 4,122,888
========== ===== ========== =====
Unrealized Currency Loss (3,882,974)
----------
Total Net Unrealized Gain per Statement of
Financial Condition 239,914
==========

2003 PARTNERSHIP NET ASSETS: $270,709,792
Commodity 6,241,497 2.31 (5,968) (0.01) 6,235,529
Equity 7,631,514 2.82 (262,587) (0.10) 7,368,927
Foreign currency 4,816,855 1.78 (1,285,220) (0.47) 3,531,635
Interest rate (290,120) (0.11) -- -- (290,120)
---------- ----- ---------- ----- ----------
Grand Total: 18,399,746 6.80 (1,553,775) (0.58) 16,845,971
========== ===== ========== =====
Unrealized Currency Loss (379,305)
----------
Total Net Unrealized Gain per Statement of
Financial Condition 16,466,666
==========

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

MORGAN STANLEY CHARTER MILLBURN L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2004 AND 2003

LONG UNREALIZED PERCENTAGE SHORT UNREALIZED PERCENTAGE
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS) OF NET ASSETS
- ------------------------------ --------------- ------------- ---------------- -------------

2004 PARTNERSHIP NET ASSETS: $60,588,540 $ % $ %

Commodity 18,125 0.03 97,467 0.16
Equity 504,281 0.83 -- --
Foreign currency 1,029,901 1.70 (325,404) (0.54)
Interest rate (11,832) (0.02) 10,402 0.02
--------- ----- ---------- -----
Grand Total: 1,540,475 2.54 (217,535) (0.36)
========= ===== ========== =====
Unrealized Currency Gain

Total Net Unrealized Gain per Statement of Financial Condition

2003 PARTNERSHIP NET ASSETS: $64,875,998
Commodity 88,962 0.14 (438) --
Equity 301,184 0.46 -- --
Foreign currency 3,458,602 5.33* (1,122,986) (1.73)
Interest rate 20,495 0.03 (16,194) (0.02)
--------- ----- ---------- -----
Grand Total: 3,869,243 5.96 (1,139,618) (1.75)
========= ===== ========== =====
Unrealized Currency Gain

Total Net Unrealized Gain per Statement of Financial Condition

NET UNREALIZED
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS)
- ------------------------------ --------------

2004 PARTNERSHIP NET ASSETS: $60,588,540 $

Commodity 115,592
Equity 504,281
Foreign currency 704,497
Interest rate (1,430)
---------
Grand Total: 1,322,940

Unrealized Currency Gain 1,974,565
---------
Total Net Unrealized Gain per Statement of Financial Condition 3,297,505
=========

2003 PARTNERSHIP NET ASSETS: $64,875,998
Commodity 88,524
Equity 301,184
Foreign currency 2,335,616
Interest rate 4,301
---------
Grand Total: 2,729,625

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

* Nosingle 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, at which time they are realized. 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 trading 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 December 2003, the American Institute
of Certified Public Accountants' Accounting Standards Executive Committee
issued Statement of Position 03-4 ("SOP 03-4") "Reporting Financial Highlights
and Schedule of Investments by Nonregistered Investment Partnerships: 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 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 net investment

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

income/(losses), expenses before and after incentive fees, and net
income/(losses) based on average net assets, and ratios for total return before
and after incentive fees based on average units outstanding to be disclosed in
Financial Highlights. SOP 03-4 was 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
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.
From May 1, 2002 to July 31, 2002, 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).
From inception to April 30, 2002, each Partnership paid a flat-rate monthly
brokerage fee of 1/12 of 7% of

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

the Partnership's Net Assets as of the first day of each month (a 7% annual
rate).

OPERATING EXPENSES. The Partnerships incur 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. Demeter does not intend to make any distributions of the
Partnerships' profits.

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 at 100% of
the Net Asset Value per Unit as of the end of the last day of any month that is
at least six months after the closing at which a person becomes a limited
partner, upon five business days advance notice by redemption form to Demeter.
Redemptions may only be made in whole Units, with a minimum of 100 Units
required 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

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

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
exchange 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 Charter MSFCM received settlement
award payments in the amount of $292,406 during August 2002 and $2,880 during
July 2004. Any amounts received are accounted for in the period received, for
the benefit of the limited partners at the date of receipt.

RECLASSIFICATIONS. Certain reclassifications have been made to the prior
years' financial statements to conform to the current year presentation. Such
reclassifications have no impact on the Partnerships' reported net income
(loss).

- --------------------------------------------------------------------------------
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

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

MSIL in futures interests trading accounts to meet 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, 2004 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.

INCENTIVE FEE. Each Partnership's incentive fee is equal to 20% of trading
profits, paid on a quarterly

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

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 Interests. 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 exchange-traded contracts is based on the settlement
price quoted by the exchange on the day with respect to which market value is
being determined. If an exchange-traded contract could not have been liquidated
on such day due to the operation of daily limits or other rules of the
exchange, the settlement price shall be the settlement price on the first
subsequent day on which the contract could be liquidated. The market value of
off-exchange-traded contracts is based on the fair market value quoted by the
counterparty.
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:

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

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

(2)Requires no initial net investment or a smaller initial net investment than
would be required relative to changes in market factors;

(3)Terms require or permit net settlement.

Generally, derivatives include futures, forward, swaps or options contracts,
and other financial instruments with similar characteristics such as caps,
floors, and collars.
The net unrealized gains (losses) on open contracts 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/
(LOSSES) ON OPEN CONTRACTS LONGEST MATURITIES
------------------------------- -------------------
OFF- OFF-
EXCHANGE- EXCHANGE- EXCHANGE- EXCHANGE-
YEAR TRADED TRADED TOTAL TRADED TRADED
---- --------- ---------- --------- --------- ---------
$ $ $

2004 3,746,156 (4,743,378) (997,222) Sep. 2005 Mar. 2005
2003 1,903,386 3,309,147 5,212,533 Sep. 2004 Mar. 2004

CHARTER MSFCM

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

2004 5,612,530 7,411,188 13,023,718 Sep. 2005 Mar. 2005
2003 5,810,267 1,100,595 6,910,862 Mar. 2004 Mar. 2004

CHARTER GRAHAM

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

2004 7,966,178 (7,726,264) 239,914 Jun. 2006 Mar. 2005
2003 17,018,386 (551,720) 16,466,666 Jun. 2005 Mar. 2004

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
---- --------- --------- --------- --------- ---------
$ $ $

2004 2,593,008 704,497 3,297,505 Dec. 2005 Mar. 2005
2003 2,040,760 2,335,616 4,376,376 Jun. 2004 Mar. 2004

The Partnerships have credit risk associated with counterparty
nonperformance. The credit risk associated with the instruments in which the
Partnerships trade 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, forward,
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, forward, 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,
forward, and futures-styled options contracts, including an amount equal to the
net unrealized gains (losses) on all open futures, forward and futures-styled
options contracts, which funds, in the aggregate, totaled $270,748,488 and
$99,731,757 for Charter Campbell, $219,055,260 and $167,619,490 for Charter
MSFCM, $477,195,064 and $262,106,808 for Charter Graham, and $60,797,909 and
$61,797,606 for Charter Millburn at December 31, 2004 and 2003, respectively.
With respect to each Partnership's off-exchange-traded forward currency
contracts, there are no daily exchange-required settlements of variation in
value, nor is there any requirement that an amount equal to the net unrealized
gains (losses) on open forward contracts be segregated. However, each
Partnership is required to meet margin requirements equal to the net unrealized

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

loss on open contracts in the Partnership accounts with the counterparty, which
is accomplished by daily maintenance of the cash balance in a custody account
held at Morgan Stanley DW for the benefit of MS&Co. 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, 2004: $ 11.14
-------
NET OPERATING RESULTS:
Interest Income 0.14
Expenses (1.24)
Realized Profit 1.90
Unrealized Loss (0.36)
-------
Net Income 0.44
-------
NET ASSET VALUE, DECEMBER 31, 2004: $ 11.58
=======
RATIOS TO AVERAGE NET ASSETS:
Net Investment Loss (9.2)%
Expenses before Incentive Fees 8.3 %
Expenses after Incentive Fees 10.4 %
Net Income 1.5 %

TOTAL RETURN BEFORE INCENTIVE FEES 6.2 %
TOTAL RETURN AFTER INCENTIVE FEES 3.9 %
INCEPTION-TO-DATE RETURN 15.8 %
COMPOUND ANNUALIZED RETURN 6.7 %

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

CHARTER MSFCM
PER UNIT:
---------
NET ASSET VALUE, JANUARY 1, 2004: $ 20.72
-------
NET OPERATING RESULTS:
Interest Income 0.23
Expenses (1.52)
Realized Loss (0.45)
Unrealized Profit 0.58
Proceeds from Litigation Settlement 0.00
-------
Net Loss (1.16)
-------
NET ASSET VALUE, DECEMBER 31, 2004: $ 19.56
=======
RATIOS TO AVERAGE NET ASSETS:
Net Investment Loss (6.8)%
Expenses before Incentive Fees 8.1 %
Expenses after Incentive Fees 8.1 %
Net Loss (4.9)%

TOTAL RETURN BEFORE INCENTIVE FEES (5.6)%
TOTAL RETURN AFTER INCENTIVE FEES (5.6)%
INCEPTION-TO-DATE RETURN 95.6 %
COMPOUND ANNUALIZED RETURN 6.4 %

CHARTER GRAHAM

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

NET ASSET VALUE, JANUARY 1, 2004: $ 21.88
--------
NET OPERATING RESULTS:
Interest Income 0.25
Expenses (1.96)
Realized Profit 2.91
Unrealized Loss (0.92)
--------
Net Income 0.28
--------
NET ASSET VALUE, DECEMBER 31, 2004: $ 22.16
========
RATIOS TO AVERAGE NET ASSETS:
Net Investment Loss (8.1)%
Expenses before Incentive Fees 7.9 %
Expenses after Incentive Fees 9.2 %
Net Income 3.3 %

TOTAL RETURN BEFORE INCENTIVE FEES 2.6 %
TOTAL RETURN AFTER INCENTIVE FEES 1.3 %
INCEPTION-TO-DATE RETURN 121.6 %
COMPOUND ANNUALIZED RETURN 14.6 %

MORGAN STANLEY CHARTER SERIES

NOTES TO FINANCIAL STATEMENTS
(concluded)

CHARTER MILLBURN

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

NET ASSET VALUE, JANUARY 1, 2004: $ 11.11
-------
NET OPERATING RESULTS:
Interest Income 0.12
Expenses (0.84)
Realized Profit 0.31
Unrealized Loss (0.18)
-------
Net Loss (0.59)
-------
NET ASSET VALUE, DECEMBER 31, 2004: $ 10.52
=======
RATIOS TO AVERAGE NET ASSETS:
Net Investment Loss (7.1)%
Expenses before Incentive Fees 8.3 %
Expenses after Incentive Fees 8.3 %
Net Loss (7.4)%

TOTAL RETURN BEFORE INCENTIVE FEES (5.3)%
TOTAL RETURN AFTER INCENTIVE FEES (5.3)%
INCEPTION-TO-DATE RETURN 5.2 %
COMPOUND ANNUALIZED RETURN 0.9 %

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