RISK CONSIDERATIONS

Diversification does not protect you against a loss in a particular market; however it allows you to spread that risk across various asset classes.

There is no assurance that a strategy will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that the market values of  securities owned by the portfolio will decline. Market values can change daily due to economic and other events (e.g. natural disasters, health crises, terrorism, conflicts and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g. portfolio liquidity) of events. Accordingly, you can lose money investing in this strategy. Please be aware that this strategy may be subject to certain additional risks. In general, equity securities’ values also fluctuate in response to activities specific to a company. The healthcare industry can be affected by various political, economic, regulatory, and supply-and-demand factors. Furthermore, it can be subject to government approval of products and services, which could have an effect on price and availability, and can be affected by rapid obsolescence and patent expirations. Investments in foreign markets entail special risks  such as currency, political, economic, and market risks. The risks of investing in emerging market countries are greater than the risks generally associated with investments in foreign developed countries. Illiquid securities may be more difficult to sell and value than publicly traded securities (liquidity risk). Investments in small- and medium- capitalization companies tend to be more volatile and less liquid than those of larger, more established, companies. Derivative instruments may disproportionately increase losses and have a significant impact on performance. They also may be subject to counterparty, liquidity, valuation, correlation and market risks. Privately placed and restricted securities may be subject to resale restrictions as well as a lack of publicly available information, which will increase their illiquidity and could adversely affect the ability to value and sell them (liquidity risk). 

This communication is only intended for and will be only distributed to persons resident in jurisdictions where such distribution or availability would not be contrary  to local laws or regulations.

There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term,  especially during periods of downturn in the market. Past performance is no guarantee of future results.

A separately managed account may not be appropriate for all investors. Separate accounts managed according to the Strategy include a number of securities and will not  necessarily track the performance of any index. Please consider the investment objectives, risks and fees of the Strategy carefully before investing. A minimum asset  level is required. For important information about the investment manager, please refer to Form ADV Part 2.

Any views and opinions provided are those of the investment management team and are subject to change at any time due to market or economic conditions and may  not necessarily come to pass. Furthermore, the views will not be updated or otherwise revised to reflect information that subsequently becomes available or  circumstances existing, or changes occurring. The views expressed do not reflect the opinions of all portfolio managers at Morgan Stanley Investment Management (MSIM) or the views of the firm as a whole, and may not be reflected in all the strategies and products that the Firm offers.

All information provided has been prepared solely for information purposes and does not constitute an offer or a recommendation to buy or sell any particular  security or to adopt any specific investment strategy. The information herein has not been based on a consideration of any individual investor circumstances and is  not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice. To that end, investors should seek independent legal and  financial advice, including advice as to tax consequences, before making any investment decision.

DEFINITIONS

Active share is a measure of the percentage of stock holdings in a manager’s portfolio that differs from the benchmark index (based on holdings and weight of  holdings). Active share scores range from 0% - 100%. A score of 100% means you are completely different from the benchmark. Free-cash-flow yield is a financial ratio  that measures a company’s operating free-cash-flow minus its capital expenditures per share and dividing by its price per share. Free-cash-flow yield ratio is  calculated by using the underlying securities of the portfolio. Return on invested capital (ROIC) represents the performance ratio measuring a company’s percentage return on its invested capital, excluding financial  and real estate sectors. Income statement items as of next twelve months based on FactSet consensus estimates, and Balance Sheet items from latest reported fiscal year.

OTHER CONSIDERATIONS

The index is unmanaged and does not include any expenses, fees or sales charges. It is not possible to invest directly in an index. Any index referred to herein is the  intellectual property (including registered trademarks) of the applicable licensor. Any product based on an index is in no way sponsored, endorsed, sold or promoted  by the applicable licensor and it shall not have any liability with respect thereto.

The Russell 3000 Health Care Net Index is a capitalization-weighted index of companies involved in medical services or health care.

The information presented represents how the portfolio management team generally implements its investment process under normal market conditions.

Weights and holdings and tracking error provided are a typical range, not a maximum number. The portfolio may exceed this from time to time due to market  conditions and outstanding trades.

Morgan Stanley Investment Management is the asset management division of Morgan Stanley.