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Morgan Stanley Technology Fund, et al. – ‘DEF 14A’ for 8/1/06

On:  Monday, 6/12/06, at 1:53pm ET   ·   Effective:  6/12/06   ·   For:  8/1/06   ·   Private-to-Public:  Document/Exhibit ¶  –  Release Delayed   ·   Accession #:  950136-6-4793   ·   File #s:  811-02978, 811-03128, 811-03129, 811-03639, 811-04310, 811-05181, 811-05415, 811-05634, 811-06683, 811-06711, 811-07245, 811-07377, 811-07683, 811-07927, 811-08265, 811-08283, 811-08861, 811-08916, 811-09117, 811-09259, 811-10343, 811-10359, 811-21042, 811-21160, 811-21248

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 6/12/06  Morgan Stanley Technology Fund    DEF 14A¶    8/01/06    3:2.6M                                   Capital Systems 01/FA
          → Morgan Stanley Technology Fund ⇒ A (IFOAX) — B (IFOBX) — C (IFOCX) — I (IFODX)
          Morgan Stanley Developing Growth Securities Trust
          → Morgan Stanley Mid Cap Growth Fund ⇒ A (DGRAX) — B (DGRBX) — C (DGRCX) — I (DGRDX)
          Morgan Stanley Convertible Securities Trust
          → Morgan Stanley Convertible Securities Trust ⇒ A (CNSAX) — B (CNSBX) — C (CNSCX) — I (CNSDX)
          Morgan Stanley Multi-Asset Class Fund
          → Morgan Stanley Multi-Asset Class Fund ⇒ A (MAFAX) — B (MAFBX) — C (MAFCX) — I (MAFDX)
          Morgan Stanley Allocator Fund
          → Morgan Stanley Allocator Fund ⇒ A (ALRAX) — B (ALRBX) — C (ALRCX) — I (ALRDX)
          Morgan Stanley Utilities Fund
          → Morgan Stanley Global Infrastructure Fund ⇒ A (UTLAX) — B (UTLBX) — I (UTLDX) — L (UTLCX) — Q (UTLQX)
          Morgan Stanley American Opportunities Fund
          → Morgan Stanley Focus Growth Fund ⇒ A (AMOAX) — B (AMOBX) — I (AMODX) — L (AMOCX)
          Morgan Stanley Dividend Growth Securities Inc
          → Morgan Stanley Dividend Growth Securities Inc. ⇒ A (DIVAX) — B (DIVBX) — C (DIVCX) — I (DIVDX)
          Morgan Stanley Natural Resource Development SEC
          → Morgan Stanley Natural Resource Development Securities ⇒ A (NREAX) — B (NREBX) — C (NRECX) — I (NREDX)
          Morgan Stanley Value Fund
          → Morgan Stanley Value Fund ⇒ A (VLUAX) — B (VLUBX) — C (VLUCX) — I (VLUDX)
          Morgan Stanley Fundamental Value Fund
          → Morgan Stanley Fundamental Value Fund ⇒ A (FVFAX) — B (FVFBX) — C (FVFCX) — I (FVFDX)
          Morgan Stanley Equally-Weighted S&P 500 Fund
          → Morgan Stanley Equally-Weighted S&P 500 Fund ⇒ A (VADAX) — B (VADBX) — C (VADCX) — I (VADDX)
          Morgan Stanley Strategist Fund
          → Morgan Stanley Global Strategist Fund ⇒ A (SRTAX) — B (SRTBX) — C (SRTCX) — I (SRTDX)
          Morgan Stanley Health Sciences Trust
          → Morgan Stanley Health Sciences Trust ⇒ A (HCRAX) — B (HCRBX) — C (HCRCX) — I (HCRDX)
          Morgan Stanley Special Growth Fund
          → Morgan Stanley Special Growth Fund ⇒ A (SMPAX) — B (SMPBX) — C (SMPCX) — I (SMPDX)
          Morgan Stanley Balanced Growth Fund
          → Morgan Stanley Balanced Fund ⇒ A (BGRAX) — B (BGRBX) — C (BGRCX) — I (BGRDX)
          Morgan Stanley Capital Opportunities Trust
          → Morgan Stanley Insight Fund ⇒ A (CPOAX) — B (CPOBX) — I (CPODX) — L (CPOCX)
          Morgan Stanley Special Value Fund
          → Morgan Stanley Special Value Fund ⇒ A (SVFAX) — B (SVFBX) — C (SVFCX) — I (SVFDX)
          Morgan Stanley Financial Services Trust
          → Morgan Stanley Financial Services Trust ⇒ A (FSVAX) — B (FSVBX) — C (FSVCX) — I (FSVDX)
          Morgan Stanley S&P 500 Index Fund
          → Morgan Stanley S&P 500 Index Fund ⇒ A (SPIAX) — B (SPIBX) — C (SPICX) — I (SPIDX)
          Morgan Stanley Real Estate Fund
          → Morgan Stanley Real Estate Fund ⇒ A (REFAX) — B (REFBX) — C (REFCX) — I (REFDX)
          Morgan Stanley Total Market Index Fund
          → Morgan Stanley Total Market Index Fund ⇒ A (TMIAX) — B (TMIBX) — C (TMICX) — I (TMIDX)
          Morgan Stanley NASDAQ - 100 Index Fund
          → Morgan Stanley Nasdaq – 100 Index Fund ⇒ A (NSQAX) — B (NSQBX) — C (NSQCX) — I (NSQDX)
          Morgan Stanley Mid Cap Value Fund
          → Morgan Stanley Mid Cap Value Fund ⇒ A (MDFAX) — B (MDFBX) — C (MDFCX) — I (MDFDX)
          Morgan Stanley Small Mid Special Value Fund
          → Morgan Stanley Small Mid Special Value Fund ⇒ A (JPJAX) — B (JPJBX) — C (JPJCX) — I (JPJDX)

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Solicitation Material              HTML   1.68M 
 3: COVER     ¶ Comment-Response or Cover Letter to the SEC         HTML      2K 
 2: CORRESP   ¶ Comment-Response or Other Letter to the SEC         HTML     11K 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.    )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [    ]

Check the appropriate box:

[   ]	Preliminary Proxy Statement

[   ]	Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

[X ]	Definitive Proxy Statement

[   ]	Definitive Additional Materials

[   ]	Soliciting Material Pursuant to § 240.14a-12

MORGAN STANLEY ALLOCATOR FUND
MORGAN STANLEY AMERICAN OPPORTUNITIES FUND
MORGAN STANLEY BALANCED GROWTH FUND
MORGAN STANLEY CAPITAL OPPORTUNITIES TRUST
MORGAN STANLEY CONVERTIBLE SECURITIES TRUST
MORGAN STANLEY DEVELOPING GROWTH SECURITIES TRUST
MORGAN STANLEY DIVIDEND GROWTH SECURITIES INC.
MORGAN STANLEY EQUALLY-WEIGHTED S&P 500 FUND
MORGAN STANLEY FINANCIAL SERVICES TRUST
MORGAN STANLEY FUNDAMENTAL VALUE FUND
MORGAN STANLEY HEALTH SCIENCES TRUST
MORGAN STANLEY INFORMATION FUND
MORGAN STANLEY MID-CAP VALUE FUND
MORGAN STANLEY MULTI-ASSET CLASS FUND
MORGAN STANLEY NASDAQ-100 INDEX FUND
MORGAN STANLEY NATURAL RESOURCE DEVELOPMENT SECURITIES INC.
MORGAN STANLEY REAL ESTATE FUND
MORGAN STANLEY S&P 500 INDEX FUND
MORGAN STANLEY SMALL-MID SPECIAL VALUE FUND
MORGAN STANLEY SPECIAL GROWTH FUND
MORGAN STANLEY SPECIAL VALUE FUND
MORGAN STANLEY STRATEGIST FUND
MORGAN STANLEY TOTAL MARKET INDEX FUND
MORGAN STANLEY UTILITIES FUND
MORGAN STANLEY VALUE FUND

(Names of Registrants as Specified in Their Charters)

(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)

Payment of Filing Fee (Check the appropriate box):

[X ]	No fee required.

[   ]	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1)    Title of each class of securities to which transaction applies:                                

2)    Aggregate number of securities to which transaction applies:                                

3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

4)	Proposed maximum aggregate value of transaction:

5)	Total fee paid:

[   ]	Fee paid previously with preliminary materials.

[   ]	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by the registration statement number, or the Form or Schedule and the date of its filing.

1)    Amount Previously Paid:                                        

2)	Form, Schedule or Registration Statement No.:

3)	Filing Party:

4)	Date Filed:

MORGAN STANLEY ALLOCATOR FUND
MORGAN STANLEY AMERICAN OPPORTUNITIES FUND
MORGAN STANLEY BALANCED GROWTH FUND
MORGAN STANLEY CAPITAL OPPORTUNITIES TRUST
MORGAN STANLEY CONVERTIBLE SECURITIES TRUST
MORGAN STANLEY DEVELOPING GROWTH SECURITIES TRUST
MORGAN STANLEY DIVIDEND GROWTH SECURITIES INC.
MORGAN STANLEY EQUALLY-WEIGHTED S&P 500 FUND
MORGAN STANLEY FINANCIAL SERVICES TRUST
MORGAN STANLEY FUNDAMENTAL VALUE FUND
MORGAN STANLEY HEALTH SCIENCES TRUST
MORGAN STANLEY INFORMATION FUND
MORGAN STANLEY MID-CAP VALUE FUND
MORGAN STANLEY MULTI-ASSET CLASS FUND
MORGAN STANLEY NASDAQ-100 INDEX FUND
MORGAN STANLEY NATURAL RESOURCE DEVELOPMENT SECURITIES INC.
MORGAN STANLEY REAL ESTATE FUND
MORGAN STANLEY S&P 500 INDEX FUND
MORGAN STANLEY SMALL-MID SPECIAL VALUE FUND
MORGAN STANLEY SPECIAL GROWTH FUND
MORGAN STANLEY SPECIAL VALUE FUND
MORGAN STANLEY STRATEGIST FUND
MORGAN STANLEY TOTAL MARKET INDEX FUND
MORGAN STANLEY UTILITIES FUND
MORGAN STANLEY VALUE FUND
c/o Morgan Stanley Investment Advisors Inc.
1221 Avenue of the Americas
New York, New York 10020

NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS

To Our Shareholders:

Notice is hereby given that a Special Meeting of Shareholders of each of the Morgan Stanley Funds listed above (each a ‘‘Fund’’ and collectively, the ‘‘Funds’’) will be held on Tuesday, August 1, 2006, at the offices of Morgan Stanley Investment Advisors Inc., 1221 Avenue of the Americas, 3^rd Floor, New York, New York 10020 at 9:00 a.m., Eastern Time. For sake of clarity, each Fund’s name has been abbreviated as set forth in Exhibit A to this Joint Proxy Statement.

The Meetings are being held for the following purposes:

	1.	To elect Trustees/Directors of the Funds.

	2.	To eliminate certain fundamental investment restrictions for all Funds, except the Allocator Fund, Fundamental Value Fund, Mid-Cap Value Fund, Nasdaq 100 Index Fund and Small-Mid Special Value Fund.

	3.	To modify certain fundamental investment restrictions for all Funds.

	4.	To reclassify certain fundamental policies as non-fundamental policies for all Funds, except the Allocator Fund, Fundamental Value Fund, Mid-Cap Value Fund, Nasdaq 100 Index Fund and Small-Mid Special Value Fund.

	5.	To change the Fund’s classification from a diversified fund to a non-diversified fund for the Financial Services Trust and Natural Resource Development Securities.

	6.	To consider and act upon any other business as may properly come before the Meetings or any adjournment thereof.

Only shareholders of record of a particular Fund at the close of business on May 30, 2006, the record date for the Meetings, are entitled to notice of, and to vote at, the Meeting of that Fund or any adjournments thereof.

MARY E. MULLIN Secretary

Dated: June 14, 2006

If you do not expect to attend the Meeting(s) for your Fund(s), please sign and promptly return the enclosed Proxy Card(s) in the enclosed self-addressed envelope or vote by telephone or electronically on the Internet as indicated in the Proxy Card(s). In order to avoid the additional expense to the Funds of further solicitation, we ask your prompt cooperation in mailing in your Proxy Card(s) or voting by telephone or electronically on the Internet.

THE MORGAN STANLEY DOMESTIC EQUITY FUNDS
c/o Morgan Stanley Investment Advisors Inc.
1221 Avenue of the Americas
New York, New York 10020

JOINT PROXY STATEMENT

Special Meetings of Shareholders
August 1, 2006

This statement is furnished by the Board of Trustees/Directors (each a ‘‘Board’’ and collectively, the ‘‘Boards’’) of each of the Morgan Stanley Domestic Equity Funds listed in the accompanying Notice of Special Meetings of Shareholders (each a ‘‘Fund’’ and collectively, the ‘‘Funds’’) in connection with the solicitation of Proxies by the Board for use at a Special Meeting of Shareholders of each Fund (each a ‘‘Meeting’’ and collectively, the ‘‘Meetings’’) to be held on Tuesday, August 1, 2006, at the principal executive office of the investment adviser for each Fund, Morgan Stanley Investment Advisors Inc. (hereinafter ‘‘MSIA’’ or the ‘‘Investment Adviser’’), 1221 Avenue of the Americas, 3^rd Floor, New York, New York 10020. It is expected that the Notice of Special Meetings, Joint Proxy Statement and Proxy Card(s) will first be mailed to shareholders on or about June 14, 2006. The purpose of the Meetings, the matters to be acted upon and the commencement time of each Meeting are set forth in the accompanying Notice of Special Meetings of Shareholders.

Each Fund is organized either as a Maryland corporation or a Massachusetts business trust. In each jurisdiction, nomenclature varies. For ease and clarity of presentation, shares of common stock or shares of beneficial interest of a Fund are referred to as ‘‘shares,’’ all holders of shares are referred to as ‘‘Shareholders,’’ the Board of Directors or the Board of Trustees of each of the Funds is referred to as the ‘‘Board,’’ the directors or trustees of each Fund are referred to as ‘‘Trustees,’’ the investment adviser of each Fund is referred to as the ‘‘Investment Adviser’’ and each Fund’s Articles of Incorporation or Declaration of Trust is referred to as its ‘‘charter.’’

If the accompanying Proxy Card for a Fund is executed properly and returned, shares represented by it will be voted at the Meeting for that Fund in accordance with the instructions on the Proxy Card. A Proxy may be revoked at any time prior to the time it is voted (i) by written notice to the Secretary of the Fund or (ii) by attendance and voting at the Meeting of such Fund. If no instructions are specified, shares will be voted FOR each Proposal applicable to that Fund.

The Board has fixed the close of business on May 30, 2006 as the record date for the determination of Shareholders entitled to notice of, and to vote at, the Meetings and at any adjournments thereof. See Exhibit A for information relating to the number of shares of each Fund outstanding and entitled to vote.

The cost of soliciting proxies for the Meeting of each Fund, consisting principally of printing and mailing expenses, is estimated at $8,476,437 and will be borne pro rata by each respective Fund based on its relative net assets. The solicitation of proxies will be by mail, which may be supplemented by solicitation by mail, telephone or otherwise through Trustees, officers of the Funds, or officers and regular employees of the Investment Adviser, Morgan Stanley Trust, Morgan Stanley Services Company Inc. and/or Morgan Stanley DW Inc., without special compensation therefor. In addition, each Fund may employ Computershare Fund Services, Inc. (‘‘Computershare’’) to make telephone calls to Shareholders to remind them to vote. The Fund may also employ Computershare as proxy solicitor if it appears that the required number of votes to achieve a quorum will not be received.

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Shareholders will be able to vote their shares by touchtone telephone or by Internet by following the instructions on the Proxy Card accompanying this Joint Proxy Statement. To vote by touchtone telephone or by Internet, Shareholders can access the website or call the toll-free number listed on the Proxy Card or noted in the enclosed voting instructions. To vote by touchtone telephone or by Internet, Shareholders will need the number that appears on the Proxy Card in the shaded box.

In certain instances, Morgan Stanley Trust or Computershare may call Shareholders to ask if they would be willing to have their votes recorded by telephone. The telephone voting procedure is designed to authenticate Shareholders’ identities, to allow Shareholders to authorize the voting of their shares in accordance with their instructions and to confirm that their instructions have been recorded properly. No recommendation will be made as to how a Shareholder should vote on any Proposal other than to refer to the recommendations of the Boards. The Funds have been advised by counsel that these procedures are consistent with the requirements of applicable law. Shareholders voting by telephone in this manner will be asked identifying information and will be given an opportunity to authorize proxies to vote their shares in accordance with their instructions. To ensure that the Shareholders’ instructions have been recorded correctly, they will receive a confirmation of their instructions in the mail. A special toll-free number set forth in the confirmation will be available in case the information contained in the confirmation is incorrect. Although a Shareholder’s vote may be taken by telephone, each Shareholder will receive a copy of this Joint Proxy Statement and may vote by mail using the enclosed Proxy Card or by touchtone telephone or the Internet as set forth above. The last proxy vote received in time to be voted, whether by Proxy Card, touchtone telephone or Internet, will be the vote that is counted and will revoke all previous votes by the Shareholder. With respect to these services, Computershare will be paid a project management fee as well as telephone solicitation expenses incurred for reminder calls, outbound telephone voting, confirmation of telephone votes, inbound telephone contact, obtaining Shareholders’ telephone numbers, and providing additional materials upon Shareholder request, at an estimated cost of $2,022,776, which would be borne by the Funds.

Each Fund will furnish, without charge, a copy of its most recent annual report or semi-annual report to any Shareholder of such Fund requesting such report. Requests for annual and/or semi-annual reports should be made in writing to the respective Fund, c/o Nina Wessel at Morgan Stanley Services Company Inc., Harborside Financial Center, Plaza Two, 2nd Floor, Jersey City, New Jersey 07311, by calling 1-800-869-NEWS, or by visiting the Investment Adviser’s Internet website at www.morganstanley.com/funds.

Morgan Stanley Services Company Inc. serves as the Funds’ administrator (the ‘‘Administrator’’). Morgan Stanley Distributors Inc. serves as each of the Fund’s distributor (the ‘‘Distributor’’). The business address of the Administrator and the Distributor is 1221 Avenue of the Americas, New York, New York 10020.

This Joint Proxy Statement is being used in order to reduce the preparation, printing, handling and postage expenses that would result from the use of a separate proxy statement for each Fund. Shares of a Fund are entitled to one vote each at the respective Fund’s Meeting and each fraction of a share will be entitled to the fraction of a vote equal to the proportion of a full share represented by the fractional share. To the extent information relating to common ownership is available to the Funds, a Shareholder that owns record shares in two or more of the Funds will receive a package containing a Joint Proxy Statement and Proxy Card(s) for the Funds in which such Shareholder is a record owner. If the information relating to common ownership is not available to the Funds, a Shareholder that beneficially owns shares in two or more Funds may receive two or more packages each containing a Joint Proxy Statement and Proxy Card(s) for those Funds in which such Shareholder is a beneficial owner. If a Proposal is approved by Shareholders of one Fund and disapproved by Shareholders of other Funds, the Proposal will be

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implemented for the Fund that approved the Proposal and will not be implemented for any Fund that did not approve the Proposal. Thus, it is essential that Shareholders complete, date, sign and return the enclosed Proxy Card(s) or vote by telephone as indicated on the Proxy Card(s).

The Shareholders are being solicited and are entitled to vote on Proposals 1, 2, 3, 4 and 5, which are outlined as follows:

Proposal 1			For all Funds			To elect Trustees of the Funds
Proposal 2			For all Funds except the Allocator Fund, Fundamental Value Fund, Mid-Cap Value Fund, Nasdaq-100 Index Fund and Small-Mid Special Value Fund			To eliminate certain fundamental investment restrictions
Proposal 3			For all Funds			To modify certain fundamental investment restrictions
Proposal 4			For all Funds except the Allocator Fund, Fundamental Value Fund, Mid-Cap Value Fund, Nasdaq-100 Index Fund and Small-Mid Special Value Fund			To reclassify certain fundamental policies as non-fundamental policies
Proposal 5			For the Financial Services Fund and Natural Resource Development Securities			To change the Fund’s classification from a diversified fund to a non-diversified fund

Under each Fund’s By-Laws, the presence at a meeting in person or by proxy of Shareholders entitled to cast a majority of the votes entitled to be cast thereat shall constitute a quorum. For this purpose, abstentions and broker ‘‘non-votes’’ will be counted in determining whether a quorum is present at the Meeting, but will not be counted as votes cast at the Meeting.

At a meeting held on April 25, 2006, the Board of each Fund determined that it was in the best interest of the Fund to approve each Proposal. After careful consideration, the Board approved the submission of each Proposal to Shareholders of each Fund for their approval.

The Board of each Fund unanimously recommends that you cast your vote ‘‘FOR’’ each Proposal set forth in this Joint Proxy Statement as follows:

	•	The election of all of the nominees as Trustees as set forth in Proposal No. 1.

	•	The elimination of certain of the Funds’ fundamental policies as set forth in Proposal No. 2.

	•	The modification of certain of the Funds’ fundamental policies as set forth in Proposal 3.

	•	The reclassification of certain of the Funds’ fundamental policies as non-fundamental policies as set forth in Proposal 4.

	•	The change in classification of certain Funds from a diversified fund to a non-diversified fund as set forth in Proposal 5.

Your vote is important. Please return your Proxy Card promptly no matter how many shares you own.

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PROPOSAL 1 — ELECTION OF TRUSTEES
Applicable Funds: All Funds

At the Meetings, Shareholders will be asked to consider the election of Trustees to hold office until their successors are duly elected and qualified. It is the intention of the persons named in the accompanying Proxy Cards to vote, on behalf of the Shareholders, for the election of Frank L. Bowman, Kathleen A. Dennis, James F. Higgins, Joseph J. Kearns, Michael F. Klein, W. Allen Reed and Fergus Reid as Trustees for an indefinite term commencing on August 1, 2006, for all Funds.

Pursuant to each Fund’s By-Laws, each Trustee holds office until (i) his or her successor has been elected and qualified, (ii) his or her death, (iii) his or her resignation or (iv) his or her removal as provided by statute or the charter.

Information Regarding Trustees and Nominee Trustees

Certain information regarding the Trustees of the Funds and nominees for election as Trustees is set forth below:

Name, Address and Age

Position(s) Held with Funds

Length of Time Served**

Principal Occupation(s) During Past Five Years

Number of Portfolios in Fund Complex Overseen by Trustee or Nominee for Trustee

Other Directorships Held by Trustee or Nominee for Trustee

Interested Nominee for Trustee

James F. Higgins* (58) c/o Morgan Stanley Trust Harborside Financial Center Plaza Two Jersey City, NJ 07311

Nominee/Trustee

Since June 2000 or since Inception Date

Director or Trustee of the funds advised by MSIA (the “Retail Funds”) (since June 2000) and various U.S. registered investment companies managed by Morgan Stanley Investment Management Inc. (the “Institutional Funds”) (since July 2003); Senior Advisor of Morgan Stanley (since August 2000); Director of Dean Witter Realty Inc.

187

Director of AXA Financial, Inc. and The Equitable Life Assurance Society of the United States (financial services).

Interested Incumbent Trustee

Charles A. Fiumefreddo* (73) c/o Morgan Stanley Trust Harborside Financial Center Plaza Two Jersey City, NJ 07311

Trustee and Chairman of the Board

Since July 1991 or since Inception Date

Chairman and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2003); formerly Chief Executive Officer of the Retail Funds (until September 2002).

187

None.

4

Name, Address and Age

Position(s) Held with Funds

Length of Time Served**

Principal Occupation(s) During Past Five Years

Number of Portfolios in Fund Complex Overseen by Trustee or Nominee for Trustee

Other Directorships Held by Trustee or Nominee for Trustee

Independent Nominees for Trustee

Frank L. Bowman (61) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036

Nominee

N/A

President and Chief Executive Officer of the Nuclear Energy Institute (since February 2005) (policy organization); formerly variously, Admiral in the U.S. Navy, Director of Naval Nuclear Propulsion Program and Deputy Administrator—Naval Reactors in the National Nuclear Security Administration at the U.S. Department of Energy (1996-2004), Honorary Knight Commander of the Most Excellent Order of the British Empire.

187

Director of the National Energy Foundation, the U.S. Energy Association, the American Council for Capital Formation and the Armed Services YMCA of the USA.

Kathleen A. Dennis (52) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036

Nominee

N/A

President, Cedarwood Associates (since 2006) (mutual fund consulting); formerly, Senior Managing Director of Victory Capital Management (1993-2006).

187

None.

Joseph J. Kearns (63) c/o Kearns & Associates LLC PMB 754 23852 Pacific Coast Highway Malibu, CA 90265

Nominee/ Trustee

Since July 2003 or since Inception Date

President, Kearns & Associates LLC (investment consulting); Deputy Chairman of the Audit Committee and Director or Trustee of the Retail Funds (since July 2003) and the Institutional Funds (since August 1994); previously Chairman of the Audit Committee of the Institutional Funds (October 2001 – July 2003); formerly Chief Financial Officer of the J. Paul Getty Trust.

188

Director of Electro Rent Corporation (equipment leasing), The Ford Family Foundation and the UCLA Foundation.

5

Name, Address and Age

Position(s) Held with Funds

Length of Time Served**

Principal Occupation(s) During Past Five Years

Number of Portfolios in Fund Complex Overseen by Trustee or Nominee for Trustee

Other Directorships Held by Trustee or Nominee for Trustee

Independent Nominees for Trustee

Michael F. Klein (47) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036

Nominee

N/A

Chief Operating Officer and Managing Director, Aetos Capital, LLC (since March 2000); Managing Director, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management and President, Morgan Stanley Institutional Funds (June 1998- March 2000); Principal, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management (August 1997-December 1999).

187

Director of certain investment funds managed or sponsored by Aetos Capital LLC

W. Allen Reed (60) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036

Nominee

N/A

President and CEO of General Motors Asset Management, Chairman and Chief Executive Officer of the GM Trust Bank and Corporate Vice President of General Motors Corporation (August 1994- December 2005).

187

Director of GMAC (financial services), GMAC Insurance Holdings, iShares, Inc. (Exchange Traded Funds), and Temple-Inland Industries (Packaging, Banking and Forrest Products); member of the Board of Executives of the New York Stock Exchange, the Investment Advisory Committee for the New York State Retirement System and the Morgan Stanley Capital International Editorial Board; Director of various investment fund advisory boards.

6

Name, Address and Age

Position(s) Held with Funds

Length of Time Served**

Principal Occupation(s) During Past Five Years

Number of Portfolios in Fund Complex Overseen by Trustee or Nominee for Trustee

Other Directorships Held by Trustee or Nominee for Trustee

Independent Nominees for Trustee

Fergus Reid (73) c/o Lumelite Plastics Corporation 85 Charles Colman Boulevard Pawling, NY 12564

Nominee/ Trustee

Since July 2003 or since Inception Date

Chairman of Lumelite Plastics Corporation; Chairman of the Governance Committee and Director or Trustee of the Retail Funds (since July 2003) and the Institutional Funds (since June 1992).

188

Trustee and Director of certain investment companies in the JPMorgan Funds complex managed by J.P. Morgan Investment Management Inc.

Independent Incumbent Trustees

Michael Bozic (65) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036

Trustee

Since April 2004 or since Inception Date

Private investor; Director or Trustee of the Retail Funds (since April 1994) and the Institutional Funds (since July 2003); formerly Vice Chairman of Kmart Corporation (December 1998 – October 2000), Chairman and Chief Executive Officer of Levitz Furniture Corporation (November 1995 – November 1998) and President and Chief Executive Officer of Hills Department Stores (May 1991 – July 1995); formerly variously Chairman, Chief Executive Officer, President and Chief Operating Officer (1987 – 1991) of the Sears Merchandise Group of Sears, Roebuck & Co.

187

Director of various business organizations.

7

Name, Address and Age

Position(s) Held with Funds

Length of Time Served**

Principal Occupation(s) During Past Five Years

Number of Portfolios in Fund Complex Overseen by Trustee or Nominee for Trustee

Other Directorships Held by Trustee or Nominee for Trustee

Independent Incumbent Trustees

Edwin J. Garn (73) 1031 North Chartwell Court Salt Lake City, UT 84103

Trustee

Since January 1993 or since Inception Date

Consultant; Director or Trustee of the Retail Funds (since January 1993) and the Institutional Funds (since July 2003); member of the Utah Regional Advisory Board of Pacific Corp. (utility company); formerly Managing Director of Summit Ventures LLC (lobbying and consulting firm) (2000 – 2004); United States Senator (R-Utah) (1974 – 1992) and Chairman, Senate Banking Committee (1980 – 1986), Mayor of Salt Lake City, Utah (1971 – 1974), Astronaut, Space Shuttle Discovery (April 12 – 19, 1985), and Vice Chairman, Huntsman Corporation (chemical company).

187

Director of Franklin Covey (time management systems), BMW Bank of North America, Inc. (industrial loan corporation), Escrow Bank USA (industrial loan corporation), United Space Alliance (joint venture between Lockheed Martin and the Boeing Company) and Nuskin Asia Pacific (multilevel marketing); member of the board of various civic and charitable organizations.

Wayne E. Hedien (72) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 1177 Avenue of the Americas New York, NY 10036

Trustee

Since September 1997 or since Inception Date

Retired; Director or Trustee of the Retail Funds (since September 1997) and the Institutional Funds (since July 2003); formerly associated with the Allstate Companies (1966 – 1994), most recently as Chairman of The Allstate Corporation (March 1993 – December 1994) and Chairman and Chief Executive Officer of its wholly owned subsidiary, Allstate Insurance Company (July 1989 – December 1994).

187

Director of The PMI Group Inc. (private mortgage insurance); Trustee and Vice Chairman of The Field Museum of Natural History; Director of various other business and charitable organizations.

8

Name, Address and Age

Position(s) Held with Funds

Length of Time Served**

Principal Occupation(s) During Past Five Years

Number of Portfolios in Fund Complex Overseen by Trustee or Nominee for Trustee

Other Directorships Held by Trustee or Nominee for Trustee

Independent Incumbent Trustees

Dr. Manuel H. Johnson (57) c/o Johnson Smick Group Inc. 888 16th Street, N.W. Suite 740 Washington, D.C. 20006

Trustee

Since July 1991 or since Inception Date

Senior Partner, Johnson Smick International, Inc., a consulting firm; Chairman of the Audit Committee and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2003); Co-Chairman and a founder of the Group of Seven Council (G7C), an international economic commission; formerly Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury.

187

Director of NVR, Inc. (home construction); Director of KFX Energy; Director of RBS Greenwich Capital Holdings (financial holding company).

Michael E. Nugent (70) c/o Triumph Capital, L.P. 445 Park Avenue New York, NY 10022

Trustee

Since July 1991 or since Inception Date

General Partner of Triumph Capital, L.P., a private investment partnership; Chairman of the Insurance Committee and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2001); formerly Vice President, Bankers Trust Company and BT Capital Corporation (1984 – 1988).

187

None.

*

‘‘Interested person’’ of the Fund within the meaning of the Investment Company Act of 1940, as amended (the ‘‘Investment Company Act’’). Mr. Fiumefreddo is the former Chairman, Chief Executive Officer and Director of Morgan Stanley Investment Advisors Inc., which is the investment adviser of the Retail Funds. Mr. Higgins is Senior Advisor to Morgan Stanley, of which the Investment Adviser is a subsidiary.

**	Each Trustee has served in such capacity since the earlier of the date listed or the Inception Date of the Fund as listed in Exhibit A.

No Trustee or nominee for election as Trustee who is not an interested person of the Funds, or any immediate family member of such person, owns securities in the Investment Adviser, or a person directly or indirectly controlling, controlled by, or under common control with the Investment Adviser.

9

Certain information regarding the executive officers of the Funds is set forth below:

Name, Address and Age			Position(s) Held with the Funds, and Length of Time Served			Principal Occupation(s) During Past Five Years
Ronald E. Robison* (67) 1221 Avenue of the Americas New York, NY 10020			President since September 2005 and Principal Executive Officer since May 2003 or since Inception Date			President (since September 2005) and Principal Executive Officer (since May 2003) of funds in the Fund Complex; President (since September 2005) and Principal Executive Officer (since May 2003) of the Van Kampen Funds; Managing Director, Director and/or Officer of the Investment Adviser and various entities affiliated with the Investment Adviser; Director of Morgan Stanley SICAV (since May 2004). Formerly, Executive Vice President (July 2003 to September 2005) of funds in the Fund Complex and the Van Kampen Funds; President and Director of the Institutional Funds (March 2001 to July 2003); Chief Global Operating Officer of Morgan Stanley Investment Management Inc.; Chief Administrative Officer of the Investment Adviser; Chief Administrative Officer of Morgan Stanley Services Company Inc.
J. David Germany*(51) Morgan Stanley Investment Management Ltd. 25 Cabot Square Canary Wharf London, United Kingdom E144QA			Vice President since February 2006 or since Inception Date			Managing Director and (since December 2005) Chief Investment Officer—Global Fixed Income of Morgan Stanley Investment Management; Managing Director and Director of Morgan Stanley Investment Management Ltd.; Vice President (since February 2006) of the Retail Funds and the Institutional Funds.
Dennis F. Shea* (53) 1221 Avenue of the Americas New York, NY 10020			Vice President since February 2006 or since Inception Date			Managing Director and (since February 2006) Chief Investment Officer—Global Equity of Morgan Stanley Investment Management; Vice President (since February 2006) of the Retail Funds and the Institutional Funds. Formerly, Managing Director and Director of Global Equity Research at Morgan Stanley.
Barry Fink* (51) 1221 Avenue of the Americas New York, NY 10020			Vice President since February 1997 or since Inception Date			Managing Director and General Counsel of Morgan Stanley Investment Management, Managing Director of the Investment Adviser and various entities affiliated with the Investment Adviser; Vice President of the Retail Funds and (since July 2003) the Institutional Funds. Formerly, Secretary, General Counsel and/or Director of the Investment Adviser and various entities affiliated with the Investment Adviser; Secretary and General Counsel of the Retail Funds.
Amy R. Doberman* (44) 1221 Avenue of the Americas New York, NY 10020			Vice President since July 2004 or since Inception Date			Managing Director and General Counsel, U.S. Investment Management of Morgan Stanley Investment Management (since July 2004); Vice President of the Retail Funds and the Institutional Funds (since July 2004); Vice President of the Van Kampen Funds (since August 2004); Secretary (since February 2006) and Managing Director (since July 2004) of the Investment Adviser and various entities affiliated with the Investment Adviser. Formerly, Managing Director and General Counsel—Americas, UBS Global Asset Management (July 2000 to July 2004).
Carsten Otto* (42) 1221 Avenue of the Americas New York, NY 10020			Chief Compliance Officer since October 2004 or since Inception Date			Managing Director and U.S. Director of Compliance for Morgan Stanley Investment Management (since October 2004); Managing Director and Chief Compliance Officer of Morgan Stanley Investment Management. Formerly, Assistant Secretary and Assistant General Counsel of the Retail Funds.

*	‘‘Interested person’’ of the Funds within the meaning of the Investment Company Act. Messrs. Robison, Germany, Shea, Fink, Otto and Smith, and Ms. Doberman, Chang Yu and Mullin are also officers of the Investment Adviser or its affiliates.

10

Name, Address and Age			Position(s) Held with the Funds, and Length of Time Served			Principal Occupation(s) During Past Five Years
Stefanie V. Chang Yu* (39) 1221 Avenue of the Americas New York, NY 10020			Vice President since July 2003 or since Inception Date			Executive Director of the Investment Adviser and various entities affiliated with the Investment Adviser; Vice President of the Retail Funds (since July 2002) and the Institutional Funds (since December 1997). Formerly, Secretary of various entities affiliated with the Investment Adviser.
Francis J. Smith* (40) c/o Morgan Stanley Trust Harborside Financial Center, Plaza Two, Jersey City, NJ 07311			Treasurer since July 2003 and Chief Financial Officer since September 2002 or since Inception Date			Executive Director of the Investment Adviser and Morgan Stanley Services Company Inc.; Treasurer and Chief Financial Officer of the Retail Funds (since July 2003). Formerly Vice President of the Retail Funds (September 2002 to July 2003).
Mary E. Mullin* (39) 1221 Avenue of the Americas New York, NY 10020			Secretary since July 2003 or since Inception Date			Executive Director of the Investment Adviser and various entities affiliated with the Investment Adviser; Secretary of the Retail Funds (since July 2003) and the Institutional Funds (since June 1999).

*	‘‘Interested person’’ of the Funds within the meaning of the Investment Company Act. Messrs. Robison, Germany, Shea, Fink, Otto and Smith, and Ms. Doberman, Chang Yu and Mullin are also officers of the Investment Adviser or its affiliates.

Each of the nominees for Trustee has consented to be named in this Joint Proxy Statement and to serve as a Trustee of the Funds if elected. The Board of each Fund has no reason to believe that any of the nominees named above will become unavailable for election as a Trustee, but if that should occur before the Meeting for that Fund, Proxy Cards will be voted for such persons as the Board of the Fund may recommend.

Share Ownership of Trustees

The Trustees have adopted a policy pursuant to which each Trustee and/or his or her spouse is required to invest at least $100,000 in any of the funds in the Morgan Stanley Retail and Institutional Funds on whose boards the Trustee serves. In addition, the policy contemplates that the Trustees will, over time, increase their aggregate investment in the funds above the $100,000 minimum requirement. The Trustees may allocate their investments among specific funds in any manner they determine is appropriate based on their individual investment objectives. Any new Trustee will be given a one year period following his or her election within which to comply with the foregoing. As of the date of this Joint Proxy Statement, each incumbent Trustee is in compliance with the policy. As of March 31, 2006, the total value of the investments by the Trustees and/or their spouses in shares of the Morgan Stanley Retail Funds and Institutional Funds was approximately $31.1 million. This amount includes compensation deferred by the Trustee at his or her election pursuant to a deferred compensation plan. Such deferred compensation is placed in a deferral account and deemed to be invested in one or more of the Retail Funds or Institutional Funds (or portfolio thereof) that are offered as investment options under the plan.

For information regarding the dollar ranges of beneficial ownership of shares in each Fund and in certain registered investment companies by the Trustees of the Funds and each nominee, please see Exhibit B.

Board Meetings and Committees

The Board of each Fund has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’). The Audit Committee provides assistance to the Board with respect to the engagement of an independent registered public accounting firm and the qualifications, independence and performance of

11

the independent registered public accounting firm. The Audit Committee also, among other things, reviews with the independent registered public accounting firm the plan and results of the audit engagement and matters having a material effect on each Fund’s financial operations. Each Fund has adopted an Audit Committee Charter. The members of the Audit Committee of each Fund are currently Michael Bozic, Edwin J. Garn, Wayne E. Hedien, Dr. Manuel H. Johnson, Joseph J. Kearns, Michael E. Nugent and Fergus Reid, none of whom is an ‘‘interested person,’’ as defined under the Investment Company Act, of any of the Funds (with such disinterested Trustees being ‘‘Independent Trustees’’ or individually, an ‘‘Independent Trustee’’). The current Chairman of each Audit Committee is Dr. Manuel H. Johnson and the Deputy Chairman is Joseph J. Kearns.

The Board of each Fund also has a Governance Committee. The Governance Committee identifies individuals qualified to serve as Independent Trustees on each Fund’s Board and its committees and recommends such qualified individuals for nomination by the Fund’s Independent Trustees as candidates for election as Independent Trustees, advises each Fund’s Board with respect to Board composition, procedures and committees, develops and recommends to each Fund’s Board a set of corporate governance principles applicable to each Fund, monitors and makes recommendations on corporate governance matters and policies and procedures of the Fund Board and its committees and oversees periodic evaluations of the Fund Board and its committees. Each Fund has adopted a formal, written Governance Committee Charter, a copy of which is attached hereto as Schedule A. The Governance Committee Charter is not available on the Funds’ website. The members of the Governance Committee of each Fund are currently Michael Bozic, Edwin J. Garn and Fergus Reid, each of whom is an Independent Trustee. The current Chairman of each Governance Committee is Fergus Reid.

None of the Funds has a separate nominating committee. While each Fund’s Governance Committee recommends qualified candidates for nominations as Independent Trustees, the Board of each Fund believes that the task of nominating prospective Independent Trustees is important enough to require the participation of all current Independent Trustees, rather than a separate committee consisting of only certain Independent Trustees. Accordingly, each current Independent Trustee (Michael Bozic, Edwin J. Garn, Wayne E. Hedien, Dr. Manuel H. Johnson, Joseph J. Kearns, Michael E. Nugent and Fergus Reid) has participated in the election and nomination of candidates for election as Independent Trustees for the respective Funds presented in this Proposal for which the Independent Trustee serves. Persons recommended as candidates for nomination as Independent Trustees are required to possess such knowledge, experience, skills, expertise and diversity so as to enhance the Board’s ability to manage and direct the affairs and business of the Fund, including, when applicable, to enhance the ability of committees of the Board to fulfill their duties and/or to satisfy any independence requirements imposed by law or regulation. While the Independent Trustees of each of the Funds expect to be able to continue to identify from their own resources an ample number of qualified candidates for each Fund’s Board as they deem appropriate, they will consider nominations from Shareholders to the Board. Nominations from Shareholders should be in writing and sent to the Independent Trustees as described below under ‘‘Shareholder Communications.’’

Finally, each Fund’s Board has formed an Insurance Committee to review and monitor the insurance coverage maintained by each Fund. The Insurance Committee for all Funds currently consists of Messrs. Nugent, Fiumefreddo and Hedien. Messrs. Nugent and Hedien are Independent Trustees.

For each respective Fund’s most recently completed fiscal year, each incumbent Trustee attended at least seventy-five percent of the aggregate number of meetings of the Board and of any committee on which he served, held during the time such Trustee was a member of the Board. See Exhibit C to this Joint Proxy Statement for further information about committee and Board meetings.

12

Shareholder Communications

Shareholders may send communications to each Fund’s Board by addressing the communication directly to that Board (or individual Board members) and/or otherwise clearly indicating in the salutation that the communication is for the Board (or individual Board members) and by sending the communication to either the Fund’s office or directly to such Board member(s) at the address specified for each Trustee above. Other Shareholder communications received by the Funds not directly addressed and sent to the Boards will be reviewed and generally responded to by management, and will be forwarded to the Boards only at management’s discretion based on the matters contained therein.

Compensation

Each Independent Trustee receives an annual fee of $180,000 for serving the Retail Funds and the Institutional Funds. Prior to October 1, 2005, each Independent Trustee received an annual retainer fee of $168,000 for serving the Retail Funds and the Institutional Funds. In addition, each Independent Trustee received $2,000 for attending each of the four quarterly board meetings and two performance meetings that occurred each year, so that an Independent Trustee who attended all six meetings received total compensation of $180,000 for serving the funds.

The Chairman of the Audit Committee of each Fund receives an additional annual retainer fee of $60,000. Other Committee Chairmen and the Deputy Chairman of the Audit Committee receive an additional annual retainer fee of $30,000. The aggregate compensation paid to each Independent Trustee is paid by the Retail Funds and the Institutional Funds, and is allocated on a pro rata basis among each of the operational funds/portfolios of the Retail Funds and the Institutional Funds based on the relative net assets of each of the funds/portfolios. Mr. Fiumefreddo receives an annual fee from the Retail Funds and the Institutional Funds for his services as Chairman of the Boards of the Retail Funds and the Institutional Funds and for administrative services provided to each Board.

The Fund also reimburses such Trustees for travel and other out-of-pocket expenses incurred by them in connection with attending such meetings. Trustees of the Fund who are employed by the Investment Adviser or an affiliated company receive no compensation or expense reimbursement from the Fund for their services as Trustee.

Effective April 1, 2004, the Funds began a Deferred Compensation Plan (the ‘‘DC Plan’’), which allows each Independent Trustee to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Trustees throughout the year. Each eligible Trustee generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Retail Funds or Institutional Funds (or portfolios thereof) that are offered as investment options under the DC Plan. At the Trustee’s election, distributions are either in one lump sum payment, or in the form of equal annual installments over a period of five years. The rights of an eligible Trustee and the beneficiaries to the amounts held under the DC Plan are unsecured and such amounts are subject to the claims of the creditors of the Fund.

Prior to April 1, 2004, the Institutional Funds maintained a similar Deferred Compensation (the ‘‘Prior DC Plan’’), which also allowed each Independent Trustee to defer payment of all, or a portion, of the fees he or she received for serving on the Board of Trustees throughout the year. The DC Plan amends and supersedes the Prior DC Plan and all amounts payable under the Prior DC Plan are now subject to the terms of the DC Plan (except for amounts paid during the calendar year 2004, which remain subject to the terms of the Prior DC Plan).

Set forth on the following page are tables showing the aggregate compensation paid by each Fund to each of its Trustees, as well as the total compensation paid to each Trustee of each Fund by all of the

13

Funds and by other U.S. registered investment companies advised by MSIA or any investment companies that have an investment adviser that is an affiliated person of MSIA (collectively, the ‘‘Fund Complex’’) for their services as Trustees of such investment companies. The aggregate compensation paid by each Fund is as of each Fund’s respective most recently completed fiscal year end. See Exhibit C for a list of each Fund’s fiscal year-end. In all cases, there were no pension or retirement benefits accrued as part of any Fund’s expenses.

The amounts reflected in the following tables include amounts paid by the Fund Complex for services rendered during the calendar year ended December 31, 2005 for each fund within the Fund Complex, regardless of whether such amounts were actually received by the Trustees during such fiscal year.

COMPENSATION TABLE

Name of Trustees			Allocator Fund						American Opportunities Fund						Balanced Growth Fund						Capital Opportunities Fund						Convertible Securities Fund						Developing Growth Fund						Dividend Growth Securities
Interested Trustee
Fiumefreddo(1)				$	307					$	8,609					$	483					$	863					$	565					$	1,334					$	18,344
Higgins(1)					0						0						0						0						0						0						0
Independent Trustee
Bozic					149						4,322						235						434						269						679						9,102
Garn					149						4,267						235						428						269						671						9,102
Hedien					149						4,322						235						434						269						679						9,102
Johnson					200						5,756						316						577						363						902						12,159
Kearns(3)					182						5,062						286						508						332						785						10,386
Nugent					174						5,039						275						506						316						790						10,631
Reid					174						5,039						275						506						316						790						10,631

Name of Trustees			Equally- Weighted S&P 500 Fund						Financial Services Fund						Fundamental Value Fund						Health Sciences Fund						Information Fund						Total Compensation from Funds and Fund Complex Paid to Trustees(2) (4)
Interested Trustee
Fiumefreddo(1)				$	4,599					$	711					$	264					$	1,156					$	1,520					$	360,000
Higgins(1)					0						0						0						0						0						0
Independent Trustee
Bozic					2,287						332						126						568						759						180,000
Garn					2,259						332						126						561						751						178,000
Hedien					2,287						332						126						568						759						180,000
Johnson					3,053						450						170						761						1,013						240,000
Kearns(3)					2,658						410						155						667						877						217,000
Nugent					2,670						391						148						664						886						210,000
Reid					2,670						391						148						664						886						215,000

14

COMPENSATION TABLE (cont'd)

Name of Trustees			Mid-Cap Value Fund						Multi-Asset Class Fund			Nasdaq-100 Index Fund						Natural Resource Development Securities						Real Estate Fund						S&P 500 Index Fund						Small-Mid Special Value Fund
Interested Trustee
Fiumefreddo(1)				$	796				0				$	127					$	395					$	495					$	4,243						527
Higgins(1)					0				0					0						0						0						0				0
Independent Trustee
Bozic					377				0					61						184						236						2,110				246
Garn					377				0					61						184						236						2,084				246
Hedien					377				0					61						184						236						2,110				246
Johnson					509				0					82						250						319						2,817				334
Kearns(3)					460				0					75						224						291						2,451				305
Nugent					443				0					71						217						278						2,463				290
Reid					443				0					71						217						278						2,463				290

Name of Trustees			Special Growth Fund						Special Value Fund						Strategist Fund						Total Market Index Fund						Utilities Fund						Value Fund						Total Compensation from Funds and Fund Complex Paid to Trustees(2) (4)
Interested Trustee
Fiumefreddo(1)				$	478					$	2,514					$	2,642					$	595					$	2,193					$	1,104					$	360,000
Higgins(1)					0						0						0						0						0						0						0
Independent Trustee
Bozic					223						1,236						1,298						278						1,103						562						180,000
Garn					223						1,221						1,282						278						1,090						555						178,000
Hedien					223						1,236						1,298						278						1,103						562						180,000
Johnson					303						1,655						1,738						377						1,468						746						240,000
Kearns(3)					271						1,453						1,526						344						1,292						650						217,000
Nugent					263						1,446						1,518						327						1,286						654						210,000
Reid					263						1,446						1,518						327						1,286						654						215,000

(1)

‘‘Interested person’’ of the Fund within the meaning of the Investment Company Act. Mr. Fiumefreddo receives an annual fee for his services as Chairman of the Boards of the Retail Funds and for administrative services provided to the Boards of the Retail Funds. As of July 1, 2006, Mr. Fiumefreddo will resign as Chairman of the Boards of the Retail Funds and will be replaced by Mr. Nugent. As a result, Mr. Nugent will receive the annual fee for his services as Chairman of the Board of the Retail Funds from that date.

(2)	Amounts shown in this column also include amounts received by each Trustee for service on the Boards of several other funds affiliated with the Funds, which are part of the Fund Complex. Because the funds in the Fund Complex have different fiscal year ends, the amounts shown in this column are presented on a calendar year basis.

(3)	Amounts shown in this table include certain amounts deferred pursuant to the DC Plan.

(4)

Prior to December 31, 2003, 49 of the Retail Funds (the ‘‘Adopting Funds’’), had adopted a retirement program under which an Independent Trustee who retired after serving for at least five years as an Independent Trustee of any such fund (an ‘‘Eligible Trustee’’) would have been entitled to retirement payments based on factors such as length of service, upon reaching the eligible retirement age. On December 31, 2003, the amount of accrued retirement benefits for each Eligible Director was frozen, and will be payable, together with a return of 8% per annum, at or following each such Eligible Trustee's retirement. Messrs. Bozic, Garn, Hedien, Johnson and Nugent were participants in this retirement program. As of the calendar year ended December 31, 2005, retirement benefits accrued by the Adopting Funds and their estimated benefits upon retirement from all Adopting Funds were $19,439 and $46,871, respectively for Bozic, $(10,738) and $46,917, respectively for Garn, $37,860 and $40,020, respectively for Hedien, $19,701 and $68,630, respectively for Johnson, and $35,471 and $61,377, respectively for Nugent. Mr. Garn’s retirement expense is negative due to the fact that his retirement date has been extended to October 31, 2007, and therefore the expense has been overaccrued.

15

Assuming a quorum is present, approval of Proposal 1 with respect to each Fund except Dividend Growth Securities and Natural Resource Development Securities will require the affirmative vote of a majority of the Fund’s shares represented in person or by proxy at the Meeting and entitled to vote at the Meeting.

Assuming a quorum is present, approval of Proposal 1 with respect to each of Dividend Growth Securities and Natural Resource Development Securities will require the affirmative vote of a plurality of the votes cast at the Meeting. A ‘‘plurality’’ means the nominee must receive more votes than any other candidate for the same position, but not necessarily a majority of the votes cast.

The Board of each Fund recommends that you vote ‘‘FOR’’ the election of the nominees as Trustees.

OVERVIEW OF PROPOSALS 2, 3 AND 4 RELATED TO THE ELIMINATION,
MODIFICATION OR RECLASSIFICATION OF CERTAIN
FUNDAMENTAL INVESTMENT RESTRICTIONS

The Investment Company Act requires a registered investment company, including each of the Funds, to have certain specific investment policies that can be changed only with shareholder approval. Investment companies may also elect to designate other policies that may be changed only with a shareholder vote. Both types of policies are often referred to as ‘‘fundamental’’ policies. In this joint proxy statement, the word ‘‘restriction’’ or ‘‘limitation’’ is sometimes used to describe a policy. Certain fundamental policies have been adopted in the past by the Funds to reflect certain regulatory, business or industry conditions that are no longer in effect. For example, the National Securities Markets Improvement Act of 1996 (‘‘NSMIA’’) preempted many investment restrictions formerly imposed by state securities laws and regulations (these state laws and regulations are often referred to as ‘‘blue sky’’ laws and regulations), so those state requirements no longer apply. As a result, many of the current restrictions unnecessarily limit the investment strategies available to the Investment Adviser in managing a Fund’s assets. In addition, the lack of uniform standards across the Funds leads to operating inefficiencies and increases the costs of compliance monitoring. Accordingly, the Investment Adviser recently conducted a review of each Fund’s fundamental policies with the following goals: (i) to simplify, modernize and make consistent with those of other investment companies advised by the Investment Adviser or its affiliates, the Funds’ policies that are required to be fundamental under the Investment Company Act, (ii) to reclassify as ‘‘non-fundamental’’ (i.e., they may be changed or eliminated by a Fund’s board without Shareholder approval) any policies that are not required to be fundamental under the Investment Company Act or the positions of the staff of the SEC in interpreting the Investment Company Act, in which case, depending on the circumstances, the policy would be either eliminated or adopted by the Board as a non-fundamental policy in the same or a modified form and (iii) to reclassify as non-fundamental or to eliminate certain policies previously required under state securities laws.

Proposals 2, 3 and 4 seek Shareholder approval of changes that are intended to accomplish the foregoing goals. Not all Proposals apply to each Fund. The proposed changes to the fundamental policies are discussed in detail below. The tables following this discussion will assist you in determining which Proposals apply to your Fund(s) and which investment policy or restriction changes are proposed for each Fund. By reducing to a minimum those policies that can be changed only by a Shareholder vote, each Fund should be able to avoid the costs and delay associated with a Shareholder meeting and each Board believes that the Investment Adviser’s ability to manage the Fund’s portfolio in a changing regulatory or investment environment will be enhanced.

Shareholders should note that certain of the proposed fundamental policies are stated in terms of ‘‘to the extent permitted by the Investment Company Act or the rules and regulations thereunder.’’

16

Applicable law can change over time and may become more or less restrictive as a result. The fundamental policies have been drafted in this manner so that a change in law would not require the Funds to seek a Shareholder vote to amend the policy to conform to applicable law, as revised. Although the Proposals give the Funds greater flexibility to respond to future investment opportunities, the Investment Adviser does not anticipate that the changes, individually or in the aggregate, will result at this time in a material change in the level of investment risk associated with an investment in the Funds, nor does the Investment Adviser anticipate that the proposed changes in the fundamental investment restrictions will, individually or in the aggregate, change materially the manner in which the Funds are managed and operated.

17

2.	PROPOSALS TO ELIMINATE CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS

Name of Fund

2A Eliminate Pledging Assets Policy

2B Eliminate Margin Policy

2C Eliminate Oil & Gas Policy

2D Eliminate Warrants Policy

2E Eliminate Trustee/ Officer Ownership Policy

2F Eliminate Exercising Control Policy

2G Eliminate Unseasoned Companies Policy

Allocator Fund

American Opportunities Fund

X

X

X

X

X

X

Balanced Growth Fund

X

X

X

X

X

X

Capital Opportunities Fund

X

X

X

X

X

X

Convertible Securities Fund

X

X

X

X

X

X

X

Developing Growth Fund

X

X

X

X

X

X

X

Dividend Growth Securities

X

X

X

X

X

X

X

Equally-Weighted S&P 500 Fund

X

X

X

X

X

X

Financial Services Fund

X

X

X

X

Fundamental Value Fund

Health Sciences Fund

X

X

X

X

X

X

Information Fund

X

X

X

X

X

Mid-Cap Value Fund

Multi-Asset Class Fund

X

X

X

Nasdaq-100 Index Fund

Natural Resource Development Securities

X

X

X

X

X

X

Real Estate Fund

X

X

X

S&P 500 Index Fund

X

X

X

X

Small-Mid Special Value Fund

Special Growth Fund

X

X

X

X

X

Special Value Fund

X

X

X

X

X

X

Strategist Fund

X

X

X

X

X

X

Total Market Index Fund

X

X

Utilities Fund

X

X

X

X

X

X

Value Fund

X

X

X

X