INFORMATION STATEMENT

MORGAN STANLEY PATHWAY FUNDS 2000 Westchester Avenue

Purchase, New York 10577

SMALL-MID CAP EQUITY FUND INTERNATIONAL EQUITY FUND

Dear Shareholder: At recent meetings of the Board of Trustees (the “Board”) of Morgan Stanley Pathway Funds (the “Trust”), the Board approved new investment advisory agreements (each, an “Advisory Agreement” and collectively, the “Advisory Agreements”) with four sub-advisers, namely, (i) Aristotle Capital Boston, LLC (“Aristotle”), D.F. Dent & Company, Inc. (“DF Dent”) and Nuance Investments, LLC (“Nuance”) for Small-Mid Cap Equity Fund and (ii) Invesco Advisers, Inc. (“Invesco”) for International Equity Fund. The Advisory Agreement with Invesco was approved to enable the International Growth team of OppenheimerFunds, Inc. (“OFI”) to continue to provide investment advisory services to International Equity Fund after the acquision of OFI by Invesco in May 2019, which triggered the termination of the existing investment advisory agreement with OFI. The OFI International Growth team, whose members transitioned to Invesco after the acquisition, have managed an allocated portion of International Equity Fund’s investment portfolio since 2014. It is anticipated that the termination of the agreement with OFI and the implementation of the Advisory Agreement with Invesco will not have any material effect on the services provided to International Equity Fund. Additionally, as was previously communicated to you in a supplement dated May 20, 2019 to the Trust’s Prospectus, Aristotle, DF Dent and Nuance began managing their respective allocated portion of Small-Mid Cap Equity Fund’s investment portfolio on May 20, 2019.

The Trust received an exemption from the U.S. Securities and Exchange Commission (“SEC”) issued on August 23, 1995, permitting the Consulting Group, a division of Consulting Group Advisory Services LLC (the “Manager”), the investment manager of the Funds (or a person controlling, controlled by or under common control with the Consulting Group), to enter into or change investment advisory agreements with sub-advisers with Board approval, but without obtaining formal shareholder approval. Accordingly, the Advisory Agreements referred to above do not require a shareholder vote. However, the SEC exemption requires that, among other things, the Trust provide an informational letter to you as a Fund shareholder whenever a new sub-adviser is selected, or an investment advisory agreement is materially changed for your Fund. Set forth below is a description of changes approved by the Board.

We are not asking you for a proxy and you are not requested to send us a proxy.

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SMALL-MID CAP EQUITY FUND Introduction

At an in-person meeting of the Board held on March 6, 2019 (“March Meeting”), the Manager recommended and the Board, including the Trustees who are not “interested persons” (as defined in the Investment Company Act of 1940, as amended (“1940 Act”)) (“Independent Trustees”), approved separate Advisory Agreements between the Manager, with respect to Small-Mid Cap Equity Fund, and Aristotle, DF Dent and Nuance (each, a “Proposed Sub-adviser” and, collectively, the “Proposed Sub-advisers”), pursuant to which each Proposed Sub-adviser would provide day-to-day management of a portion of Small-Mid Cap Equity Fund’s portfolio allocated to it by the Manager. The Proposed Sub-advisers began managing their respective allocated portion of the assets of Small-Mid Cap Equity Fund on May 20, 2019. Small-Mid Cap Equity Fund’s assets currently are allocated among six sub-advisers. Manager’s Recommendation and the Board’s Consideration At the March Meeting, the Manager recommended each Proposed Sub-adviser based on, among other factors, the Manager’s evaluation of the Proposed Sub-adviser’s performance during various time periods and market cycles, the Sub-adviser’s reputation, experience, and investment philosophy and policies, and the Manager’s analysis that the Proposed Sub-adviser’s investment strategy is complementary to the investment strategies of the Fund’s other sub-advisers.

• Aristotle invests the Fund’s assets allocated to it in equity securities of small and mid-capitalization companies. Aristotle considers small and mid-capitalization companies to be those companies that, at the time of initial purchase, typically have a market capitalization equal to or less than that of the largest company in the Russell 2500® Index during the most recent 12-month period. The Russell 2500® Index is reconstituted annually. Because small and mid-capitalization companies are defined by reference to an index, the range of market capitalization of companies in which the strategy invests may vary with market conditions. Investments in companies that move above or below the capitalization range of the index may continue to be held in the Fund’s portfolio allocated to Aristotle. Aristotle’s strategy seeks to construct a diversified, quality-oriented portfolio that is managed with a long-term time horizon. The Aristotle investment team uses a fundamental, bottom‐up approach to identify businesses the team believes possess quality management teams, favorable industry dynamics and attractive or improving financials, and seeks to invest in companies that are trading at meaningful discounts relative to intrinsic value. Research is generated using both qualitative and quantitative inputs to develop an in-depth understanding of individual businesses. The portfolio consists of 80 to 120 holdings with a cash position limited to less than 5% of the portfolio. Sectors are limited to +/-10% of the sector’s weight in the Russell 2500® Index. The percentage of the Fund’s assets allocated to Aristotle is targeted at 15%.

• DF Dent typically invests the Fund’s assets allocated to it in U.S.-listed equity securities, consisting of common stocks, real estate investment trusts (“REITS”), and exchange-traded funds (“ETFs”). DF Dent invests in equity securities of domestic companies that in its view possess superior long-term growth characteristics and have strong, sustainable earnings prospects and reasonably valued stock prices. DF Dent may invest in companies that do not have particularly strong earnings histories, but do have other attributes that in its view may contribute to accelerated growth in the foreseeable future. DF Dent relies on selecting individual stocks and does not try to predict when the stock market may rise or fall. DF Dent uses in-house research and other sources to conduct analyses of prospective Fund investments. In selecting investments for the Fund, the DF Dent process begins with an economic analysis of prospective investments across a range of industries. DF Dent then uses fundamental research to identify companies that it believes are well managed, are leaders in an industry niche, are consistent producers and/or exhibit sustainable growth. DF Dent may sell a security held in the Fund’s portfolio if, for example, DF Dent believes it has become overvalued or its fundamentals have changed. DF Dent may also change the weighting of a stock held in the Fund’s portfolio if it becomes an excessively large position within the Fund due to appreciation. In addition, DF Dent may strategically invest a significant portion of the Fund’s total assets allocated to it in cash or cash equivalents if, in certain market conditions, other appropriate investments for the Fund are not available at prices DF Dent believes are favorable to the Fund. The percentage of the Fund’s assets allocated to DF Dent is targeted at 10%.

• Nuance selects securities for the portion of the Fund’s portfolio allocated to it using an extensive quantitative screening and fundamental research process that seeks to identify leading businesses selling at a discount to fair value with the potential to generate above-average rates of returns over time. Nuance seeks to identify companies across a range of industries and market sectors that have leading and sustainable market share positions, above-average financial strength, and are trading at a discount to Nuance’s internal view of intrinsic value. Nuance may sell an investment when it achieves or surpasses Nuance’s proprietary view of intrinsic value or when a security’s competitive position or financial situation erodes beyond Nuance’s expectations. The percentage of the Fund’s assets allocated to Nuance is targeted at 12%.

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At the March Meeting, the Board, including the Independent Trustees, considered and approved a separate Advisory Agreement with each of the Proposed Sub-advisers. With respect to each Proposed Sub-adviser, in determining whether to approve the Advisory Agreement, the Board considered the due diligence materials prepared by the Manager and other information, which included a copy of the Advisory Agreement including the sub-investment advisory fee to be paid to each Proposed Sub-adviser, and information regarding: (i) the process by which the Manager selected and recommended each Proposed Sub-adviser for Board approval; (ii) the nature, extent and quality of the services expected to be provided by each Proposed Sub-adviser to Small-Mid Cap Equity Fund; and (iii) each Proposed Sub-adviser’s (A) investment management business, personnel, and operations, (B) portfolio trading policies and practices, (C) compliance program, (D) historical performance returns managing investment mandates similar to the Small-Mid Cap Equity Fund’s investment mandate, with such performance compared to a relevant index and Morningstar and Lipper fund categories, and (E) financial condition. The Independent Trustees considered the Manager’s favorable assessment of the nature and quality of the sub-advisory services expected to be provided to the Small-Mid Cap Equity Fund by each Proposed Sub-adviser. The Independent Trustees also discussed the acceptability of the terms of each Advisory Agreement, noting the substantial similarity to the terms of the investment advisory agreements with the Trust’s other sub-advisers. The Independent Trustees also considered whether there were any ancillary benefits that may accrue to a Proposed Sub-adviser as a result of its relationship with the Small-Mid Cap Equity Fund. The relevant materials and information were provided to the Board, including all of the Independent Trustees, in advance of and at the March Meeting. Representatives from each of the Proposed Sub-advisers also made a presentation to and responded to questions from the Board. The Independent Trustees were assisted in their review by Fund counsel and independent legal counsel and met with independent legal counsel in executive sessions separate from representatives of the Manager and the Proposed Sub-advisers. The Independent Trustees concluded, with respect to each Proposed Sub-adviser, that the nature, extent and quality of the investment advisory services expected to be provided by the Proposed Sub-adviser were adequate and appropriate in light of the Proposed Sub-adviser’s expertise and the qualifications of its investment personnel in providing portfolio management services to other investment portfolios with an investment mandate similar to that of the Fund and the performance history of those portfolios, the Proposed Sub-adviser’s portfolio management and research resources to be applied in managing the portion of the Small-Mid Cap Equity Fund’s assets to be allocated to it, the Proposed Sub-adviser’s compliance program and the Manager’s recommendation to engage the Proposed Sub-adviser, and supported a decision to approve each Advisory Agreement with the respective Proposed Sub-adviser. Because each Proposed Sub-adviser was a newly-appointed sub-adviser for the Small-Mid Cap Equity Fund, the Independent Trustees could not consider its investment performance in managing the Small-Mid Cap Equity Fund’s portfolio as a factor in evaluating the Advisory Agreements during the March Meeting. The Independent Trustees discussed with representatives of the Manager the investment strategy to be employed by each Proposed Sub-adviser in the management of the Small-Mid Cap Equity Fund’s assets. The Independent Trustees noted the historical performance returns of each Proposed Sub-adviser managing investment mandates similar to the Small-Mid Cap Equity Fund’s investment mandate, with such performance compared to a relevant index and Morningstar and Lipper fund categories, and the Manager’s experience and reputation in selecting, evaluating and overseeing investment advisers. Based on these factors, the Board supported a decision to approve each Advisory Agreement with the Proposed Sub-advisers. The Independent Trustees reviewed and considered the sub-advisory fee payable under each Advisory Agreement to the respective Proposed Sub-adviser. The Independent Trustees noted that each proposed fee payable to the Proposed Sub-advisers would be paid by the Manager, and not the Small-Mid Cap Equity Fund, and, thus, would not impact the fees paid by the Small-Mid Cap Equity Fund. The Independent Trustees concluded, with respect to each Proposed Sub-adviser, that the proposed fee payable to the Proposed Sub-adviser by the Manager with respect to the assets to be allocated to the Proposed Sub-adviser was appropriate. The Independent Trustees recognized that, because each Proposed Sub-adviser’s fee would be paid by the Manager, and not the Small-Mid Cap Equity Fund, an analysis of profitability was more appropriate in the context of the Board’s consideration of the management agreement between the Trust and the Manager. The Board received and considered a profitability analysis of the Manager with respect to the replacement of three of the Small-Mid Cap Equity Fund’s then-current sub-advisers with the Proposed Sub-advisers and determined that the Manager’s profitability was not excessive in light of the nature, extent and quality of the services to be provided to the Small-Mid Cap Equity Fund by the Manager and each Proposed Sub-adviser. Similarly, the Independent Trustees recognized that, because each Proposed Sub-adviser’s fee would be paid by the Manager, and not the Small-Mid Cap Equity Fund, an analysis of economies of scale in connection with the engagement of the Proposed Sub-advisers was more appropriate in the context of the Board’s consideration of the management agreement between the Trust and the Manager. Accordingly, consideration of economies of scale with respect to each Proposed Sub-adviser was not relevant to the Independent Trustees’ determination to approve the Advisory Agreements. The Independent Trustees also concluded that any benefits that were expected to accrue to the Proposed Sub-advisers by virtue of their respective relationship with the Small-Mid Cap Equity Fund were reasonable.

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After full consideration of the factors discussed above, with no single factor identified as being of paramount importance, the Board, including the Independent Trustees, with the assistance of Fund counsel and independent legal counsel, concluded that the approval of each Advisory Agreement was in the best interests of the Small-Mid Cap Equity Fund, and approved the Advisory Agreements. The Manager entered into a separate Advisory Agreement with each Proposed Sub-adviser, which began managing the assets of the Small-Mid Cap Equity Fund allocated to it by the Manager on May 20, 2019. The Manager determined that the target percentages of the Small-Mid Cap Equity Fund’s assets to be allocated to each Proposed Sub-adviser and the Fund’s other sub-advisers would be approximately as follows: 15% to Aristotle, 42% to BlackRock Financial Management, Inc. (“BlackRock”), 10% to DF Dent, 11% to Neuberger Berman Investment Advisers LLC, 12% to Nuance and 10% to Westfield Capital Management Company, L.P., such allocations having been previously approved by the Board. The Advisory Agreements The terms of each Advisory Agreement were similar in all material respects to the agreements between the Manager and the Trust’s other sub-advisers. Each Advisory Agreement provides that, subject to the supervision of the Board and the Manager, the Proposed Sub-adviser shall manage the investments of the portion of the Fund’s assets allocated to it in accordance with the Fund’s investment objective, policies and restrictions, and in compliance with the requirements applicable to registered investment companies and such other limitations as the Manager may institute. Each Advisory Agreement provides that the Proposed Sub-adviser will exercise its best judgment in rendering its services to the Small-Mid Cap Equity Fund and, except as may otherwise be required by the 1940 Act or the rules thereunder or other applicable law, will not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund or the Manager in connection with the matters to which the Advisory Agreement relates, except a loss resulting from the Proposed Sub-adviser’s willful misfeasance, bad faith or gross negligence in the performance of its duties or from reckless disregard by it of its obligations and duties under the Advisory Agreement. Each Advisory Agreement sets forth information about the term of the Advisory Agreement and the fees to be paid to the Proposed Sub-advisers by the Manager thereunder. The Small-Mid Cap Equity Fund has agreed to pay the Manager a management fee at the annual rate of 0.80% of the value of the Small-Mid Cap Equity Fund’s average daily net assets, from which, the Manager will pay the Small-Mid Cap Equity Fund’s sub-advisers. Effective January 1, 2019, the Manager has contractually agreed to waive fees and reimburse expenses for a period of one year in order to keep the Small-Mid Cap Equity Fund’s management fees from exceeding the total amount of sub-advisory fees paid by the Manager plus 0.20% based on average net assets. This contractual waiver will only apply if the Small-Mid Cap Equity Fund’s total management fees exceed the total amount of sub-advisory fees paid by the Manager plus 0.20% and will not affect the Fund’s total management fees if they are less than such amount. This fee waiver and reimbursement agreement will remain in effect until January 1, 2020. Additional Information about Aristotle Aristotle’s offices are located at 125 Summer Street, Suite 1220, Boston, MA 02110. Aristotle is registered with the SEC as an investment adviser. Listed below are the names and principal occupations of the senior personnel of Aristotle responsible for the day-to-day management of the Small-Mid Cap Equity Fund’s assets allocated to Aristotle. The principal business address of each person, as it relates to his or her duties at Aristotle, is the same as that of Aristotle.

Name

Position with Aristotle Years with Aristotle

David Adams, CFA®, CEO and Portfolio Manager 4 John McPherson, CFA® President and Portfolio Manager 4

Additional Information about DF Dent DF Dent’s offices are located at 400 E. Pratt Street, Suite 720, Baltimore, MD 21202. DF Dent is registered with the SEC as an investment adviser. Listed below are the names and principal occupations of the senior personnel of DF Dent responsible for the day-to-day management of the Small-Mid Cap Equity Fund’s assets allocated to DF Dent. The principal business address of each person, as it relates to his or her duties at DF Dent, is the same as that of DF Dent.

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Name

Position with DF Dent Years with DF Dent

Matthew Dent, CFA®, President and Portfolio Manager 18 Bruce Kennedy II, CFA® Vice President and Portfolio Manager 12 Gary Mitchell Vice President and Portfolio Manager 14 Thomas O’Neil, JR, CFA® Vice President and Portfolio Manager 32

Additional Information about Nuance Nuance’s offices are located at 4900 Main Street, Suite 220, Kansas City, MO 64112. Nuance is registered with the SEC as an investment adviser. Listed below are the names and principal occupations of the senior personnel of Nuance responsible for the day-to-day management of the Small-Mid Cap Equity Fund’s assets allocated to Nuance. The principal business address of each person, as it relates to his or her duties at Nuance, is the same as that of Nuance.

Name

Position with Nuance Years with Nuance

Chad Baumler, CFA® Vice President and Portfolio Manager 5 Scott Moore, CFA® Chief Investment Officer and President 11

Comparable Funds Each Aristotle, DF Dent and Nuance currently manages other investment companies or accounts having similar investment objectives and strategies as the Small-Mid Cap Equity Fund. Payments of Commissions to Affiliated Brokers During the fiscal year ended August 31, 2018, the Small-Mid Cap Equity Fund made aggregate brokerage commission payments of $467 to Morgan Stanley & Co. These brokerage commissions accounted for 0.13% of the Small-Mid Cap Equity Fund’s aggregate brokerage commissions. Purchases of Securities by Trustees None of the Trustee of the Trust owns any securities issued by Aristotle, DF Dent or Nuance.

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INTERNATIONAL EQUITY FUND Introduction At an in-person meeting of the Board held on May 13-14, 2019 (“May Meeting”), the Trustees discussed the then-pending acquisition of OFI, a sub-adviser to International Equity Fund, by Invesco (the “Transaction”). At the May Meeting, the Manager reported that the Transaction was expected to close in the second quarter of 2019. The Board considered that the Transaction would result in a “change of control” under applicable provisions of the 1940 Act, which provides that a “change of control” of a fund’s investment adviser results in an “assignment,” and a consequent automatic termination of an advisory agreement between the fund and the investment adviser. To enable OFI’s International Growth team, which has managed an allocated portion of International Equity Fund’s investment portfolio since 2014, to continue to provide investment advisory services to International Equity Fund after the closing of the Transaction, the Manager recommended and the Board, including a majority of the Independent Trustees, approved the Advisory Agreement between the Manager, with respect to the International Equity Fund, and Invesco, pursuant to which Invesco would provide day-to-day management of a portion of the International Equity Fund’s portfolio allocated to it by the Manager after the Transaction. The Transaction closed May 24, 2019 and Invesco, through the former OFI International Growth team, whose members transitioned to Invesco on that date, began managing the portion of the International Equity Fund’s assets previously allocated to OFI.

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Manager’s Recommendation and the Board’s Consideration The Manager determined that the Transaction would not have any material effect on the services provided to the International Equity Fund by Invesco (formerly OFI) and that Invesco would be suited to meet the investment objective of the International Equity Fund. Additionally, representatives of the Manager confirmed that there would be no change as a result of the Transaction in the International Growth team’s portfolio managers or investment process for managing the portion of the International Equity Fund’s investment portfolio allocated to Invesco. As a result of both of these determinations, at the May Meeting, the Manager recommended Invesco based on, among other factors, the Manager’s evaluation of the performance during various time periods and market cycles, reputation, experience, and investment philosophy and policies, and the Manager’s analysis that the investment strategy would remain complementary to the investment strategies of the Fund’s other sub-advisers.

• Invesco invests in the common stock of growth companies that are domiciled or have their primary operations outside of the United States. In selecting investments for the International Equity Fund’s portfolio, the portfolio managers evaluate investment opportunities on a company-by-company basis. The portfolio managers look primarily for foreign companies with high growth potential using a “bottom up” investment approach, that is, by looking at the investment performance of individual stocks before considering the impact of general or industry-specific economic trends. This approach includes fundamental analysis of a company’s financial statements and management structure and consideration of the company’s operations, product development, and industry position. The portfolio managers currently focus on the following factors, which may vary in particular cases and may change over time: companies that enjoy a strong competitive position and high demand for their products or services; companies with accelerating earnings growth and cash flow; and diversity among companies, industries and countries to help reduce the risks of foreign investing, such as currency fluctuations and stock market volatility. The portfolio managers also consider the effect of worldwide trends on the growth of particular business sectors and look for companies that may benefit from those trends. The trends currently considered include: mass affluence, new technologies, restructuring and aging. The portfolio managers do not invest any fixed amount of the Fund’s assets according to these criteria and the trends that are considered may change over time. The portfolio managers monitor individual issuers for changes in the factors above, which may trigger a decision to sell a security, but does not require a decision to do so. The percentage of the International Equity Fund’s assets allocated to Invesco is targeted at 17%.

At the May Meeting, the Board, including the Independent Trustees, considered and approved the Advisory Agreement with Invesco. With respect to Invesco, in determining whether to approve the Advisory Agreement, the Board considered the due diligence materials prepared by the Manager and other information, which included a copy of the Advisory Agreement including the sub-investment advisory fee to be paid to Invesco, and information regarding: (i) the process by which the Manager initially selected and recommended OFI for Board approval, and more recently recommended the Board approve Invesco following the closing of the Transaction; (ii) the nature, extent and quality of the services Invesco would provide to International Equity Fund; and (iii) Invesco’s (A) investment management business, personnel, and operations, (B) portfolio trading policies and practices, (C) compliance program, (D) historical performance returns of OFI managing the International Equity Fund’s assets allocated to it and those of Invesco managing investment mandates similar to the International Equity Fund’s investment mandate, with such performance compared to a relevant index and Morningstar and Lipper fund categories, and (E) financial condition. The Independent Trustees considered the Manager’s favorable assessment of the nature and quality of the sub-advisory services provided by OFI and expected to be provided to the International Equity Fund by Invesco. The Independent Trustees also discussed the acceptability of the terms of the Advisory Agreement, noting the substantial similarity to the terms of the investment advisory agreements with the Trust’s other sub-advisers, including the agreement with OFI. The Independent Trustees also considered whether there were any ancillary benefits that may accrue to Invesco as a result of its relationship with the International Equity Fund. The relevant materials and information were provided to the Board, including all of the Independent Trustees, in advance of and at the May Meeting. Representatives from Invesco also made a presentation to and responded to questions from the Board. The Independent Trustees were assisted in their review by Fund counsel and independent legal counsel and met with independent legal counsel in executive sessions separate from representatives of the Manager and Invesco. The Independent Trustees concluded, that the nature, extent and quality of the investment advisory services that were provided by OFI under its investment advisory agreement and those expected to be provided by Invesco after the Transaction, as well as Invesco’s ability to continue to render such services pursuant to the Advisory Agreement, were adequate and appropriate in light of Invesco’s expertise and the qualifications of its investment personnel in providing portfolio management services to other similar investment portfolios and the performance history of those portfolios, Invesco’s portfolio management and research resources to be applied in managing a portion of the International Equity Fund’s assets allocated to it, Invesco’s compliance program, the Manager’s recommendation to engage Invesco and the Manager’s favorable assessment of the nature and quality of the sub-investment advisory services provided by OFI under its investment advisory agreement and those expected to be provided to the Fund by Invesco after consummation of the Transaction, and supported a decision to approve the Advisory Agreement with Invesco.

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The Board considered OFI's investment performance in managing its allocated portion of the Fund's portfolio as a factor in evaluating the Sub-Advisory Agreement with Invesco as it was confirmed that the same Investment Growth team members were expected to transition to Invesco after consummation of the Transaction. The Independent Trustees concluded that the OFI International Growth team’s historical performance record in managing its allocated portion of the International Equity Fund’s assets and similar products, when viewed together with the other factors considered by the Board, supported a decision to approve the Advisory Agreement with Invesco. The Independent Trustees reviewed and considered the sub-advisory fee payable under the Advisory Agreement to Invesco. The Independent Trustees noted that the proposed fee payable to Invesco would be paid by the Manager, and not the International Equity Fund, and, thus, would not impact the fees paid by the International Equity Fund. The Independent Trustees concluded, with respect to Invesco, that the proposed fee payable to Invesco by the Manager with respect to the assets to be allocated to Invesco was appropriate. The Independent Trustees recognized that, because Invesco’s fee would be paid by the Manager, and not the International Equity Fund, an analysis of profitability was more appropriate in the context of the Board’s consideration of the management agreement between the Trust and the Manager. The Board received and considered a profitability analysis of the Manager and its affiliates. The Independent Trustees noted that the fee payable to Invesco by the Manager under the Advisory Agreement was the same as that payable under the investment advisory agreement with OFI and, thus, approval of the Advisory Agreement with Invesco had no impact on the Manager’s profitability. The Independent Trustees concluded that the Manager’s profitability was not excessive in light of the nature, extent and quality of services to be provided to the International Equity Fund by the Manager and Invesco under the Advisory Agreement. Similarly, the Independent Trustees recognized that, because Invesco’s sub-adviser fee would continue to be paid by the Manager, and not the International Equity Fund, an analysis of economies of scale in connection with the engagement of Invesco was more appropriate in the context of the Board’s consideration of the management agreement between the Trust and the Manager. Accordingly, consideration of economies of scale with respect to Invesco was not relevant to the Independent Trustees’ determination to approve the Advisory Agreement with Invesco. The Independent Trustees also concluded that any benefits that were expected to accrue to Invesco by virtue of its relationship with the International Equity Fund were reasonable. After full consideration of the factors discussed above, with no single factor identified as being of paramount importance, the Board, including the Independent Trustees, with the assistance of Fund counsel and independent legal counsel, concluded that the approval of the Advisory Agreement with Invesco was in the best interests of the International Equity Fund, and approved the Advisory Agreement. The Manager entered into an Advisory Agreement with Invesco, which began managing the assets of the International Equity Fund allocated to it by the Manager on May 24, 2019. The Manager determined that the target percentages of the International Equity Fund’s assets to be allocated to Invesco and the Fund’s other sub-advisers would be approximately as follows: 25% to BlackRock, 17% to Causeway Capital Management LLC, 17% to Invesco, 16% to Schroder Investment Management North America Inc., 10% to Victory Capital Management, Inc. and 15% to Wellington Management Company, LLP, such allocations having been previously approved by the Board. The Advisory Agreement The terms of the Advisory Agreement with Invesco were similar in all material respects to the agreements between the Manager and the Trust’s other sub-advisers, including the investment advisory agreement with OFI. The Advisory Agreement provides that, subject to the supervision of the Board and the Manager, Invesco shall manage the investments of the portion of the Fund’s assets allocated to it in accordance with the Fund’s investment objective, policies and restrictions, and in compliance with the requirements applicable to registered investment companies and such other limitations as the Manager may institute. The Advisory Agreement provides that Invesco will exercise its best judgment in rendering its services to the International Equity Fund and, except as may otherwise be required by the 1940 Act or the rules thereunder or other applicable law, will not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund or the Manager in connection with the matters to which the Advisory Agreement relates, except a loss resulting from Invesco’s willful misfeasance, bad faith or gross negligence in the performance of its duties or from reckless disregard by it of its obligations and duties under the Advisory Agreement. The Advisory Agreement sets forth information about the term of the Advisory Agreement and the fees to be paid to Invesco by the Manager thereunder. The International Equity Fund has agreed to pay the Manager a management fee at the annual rate of 0.70% of the value of the International Equity Fund’s average daily net assets, from which, the Manager will pay the International Equity Fund’s Sub-advisers. Effective January 1, 2019, the Manager has contractually agreed to waive fees and reimburse expenses for a period of one year in order to keep the International Equity Fund’s management fees from exceeding the total amount of sub-advisory fees paid by the Manager plus 0.20% based on average net assets. This contractual waiver will only apply if the International Equity Fund’s total management fees exceed the total amount of sub-advisory fees paid by the Manager plus 0.20% and will not affect the

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Fund’s total management fees if they are less than such amount. This fee waiver and reimbursement agreement shall remain in effect until January 1, 2020. Additional Information about Invesco Invesco’s offices are located at 1555 Peachtree Street, N.E., Atlanta, GA 30309. Invesco is registered with the SEC as an investment adviser. Listed below are the names and principal occupations of the senior personnel of Invesco responsible for the day-to-day management of the International Equity Fund’s assets allocated to Invesco. The principal business address of each person, as it relates to his or her duties at Invesco, is the same as that of Invesco.

Name

Position with Invesco Years with Invesco

Robert B. Dunphy, CFA® Vice President and Portfolio Manager <1 George R. Evans, CFA® Senior Vice President and Chief Investment Officer –

Equities and Portfolio Manager <1

Comparable Funds Invesco currently manages other investment companies or accounts having similar investment objectives and strategies as the International Equity Fund. Payments of Commissions to Affiliated Brokers During the fiscal year ended August 31, 2018, the International Equity Fund made aggregate brokerage commission payments of $4,636 to Morgan Stanley & Co. These brokerage commissions accounted for 0.53% of the International Equity Fund’s aggregate brokerage commissions. Purchases of Securities by Trustees None of the Trustee of the Trust owns any securities issued by Invesco.

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FUND-LEVEL OWNERSHIP/SHARES OUTSTANDING

Fund

Total Net Assets as of August 31, 2018

Shares Outstanding as August 31, 2018

Small-Mid Cap Equity Fund $520,496,674.66 22,568,826.593

International Equity Fund $1,676,524,438.67 132,593,005.694 To the knowledge of the Manager, as of August 31, 2018, the Board members and officers of the Trust, as a group, owned of record less than 1% of the outstanding shares of the Funds described in this informational letter. Beneficial Share Ownership As of August 31, 2018, there were no shareholders who owned beneficially 5% or more of the shares of the Funds. OTHER INFORMATION Manager Consulting Group Advisory Services LLC, a business of Morgan Stanley Smith Barney Holdings LLC, serves as the investment adviser for the Fund and is located at 2000 Westchester Avenue, Purchase, NY 10577. The Manager selects and oversees professional money managers (the sub-advisers) who are responsible for investing the assets of the Fund.

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Distributor The Trust’s distributor, Morgan Stanley Smith Barney LLC, is located at 2000 Westchester Avenue, Purchase, NY 10577. Administrator Brown Brothers Harriman & Co. serves as the administrator to the Funds and is located at 50 Post Office Square, Boston, MA 02110. Householding Only one copy of this informational letter is mailed to households, even if more than one person in a household is a Fund shareholder of record, unless the Fund has received instructions to the contrary. If you need additional copies of this informational letter, or if you do not want the mailing of an informational letter to be combined with those for other members of your household in the future, or if you are receiving multiple copies and would rather receive just one copy for the household, please contact the Trust by calling 1-888-454-3965 or by writing to the Trust at 2000 Westchester Avenue, Purchase, NY 10577. Annual/Semi-Annual Reports

Shareholders can obtain a copy of the Trust’s most recent Annual Report and any Semi-Annual Report following the Annual Report, without charge, by calling 1-888-454-3965 or by writing to the Trust at 2000 Westchester Avenue, Purchase, NY 10577.

ON BEHALF OF THE BOARD OF TRUSTEES OF MORGAN STANLEY PATHWAY FUNDS

Eric Metallo Secretary August 8, 2019

 

INFORMATION STATEMENT

MORGAN STANLEY PATHWAY FUNDS 2000 Westchester Avenue

Purchase, New York 10577

MUNICIPAL BOND FUND

Dear Shareholder:

At the December 2018 Meeting (the “Meeting”) of the Board of Trustees (the “Board”) of Morgan Stanley Pathway Funds (the “Trust”), the Board approved a new investment advisory agreement (“Advisory Agreement”) with a new sub-adviser, BlackRock Financial Management, Inc. (“BlackRock” or the “Sub-adviser”), for Municipal Bond Fund. As was previously communicated to you in a supplement dated February 25, 2019 to the Trust’s Prospectus, BlackRock began managing the Municipal Bond Fund’s investment portfolio on February 25, 2019.

The Trust received an exemption from the U.S. Securities and Exchange Commission (“SEC”) issued on August 23, 1995, permitting the Consulting Group, a division of Consulting Group Advisory Services LLC (the “Manager”), the investment manager of the Funds (or a person controlling, controlled by or under common control with the Consulting Group), to enter into or change investment advisory agreements with sub-advisers with Board approval, but without obtaining formal shareholder approval. Accordingly, the Advisory Agreement referred to above does not require a shareholder vote.

However, the SEC exemption requires that, among other things, the Trust provide an informational letter to you as a Fund shareholder whenever a new sub-adviser is selected or an investment advisory agreement is changed for your Fund. Set forth below is a description of changes approved by the Board.

We are not asking you for a proxy and you are not requested to send us a proxy.

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MUNICIPAL BOND FUND Introduction

At the Meeting, the Manager recommended and the Board, including the Trustees who are not “interested persons” (as defined in the Investment Company Act of 1940, as amended (“1940 Act”)) (“Independent Trustees”), approved the Advisory Agreement between the Manager, with respect to Municipal Bond Fund, and BlackRock, pursuant to which BlackRock would provide day-to-day management of the portion of Municipal Bond Fund’s portfolio allocated to it by the Manager. BlackRock began managing all of the assets of Municipal Bond Fund effective February 25, 2019. Manager’s Recommendation and the Board’s Consideration At the Meeting, the Manager recommended BlackRock based on, among other factors, the Manager’s evaluation of the performance of BlackRock’s national municipal strategy during various time periods and market cycles, and BlackRock’s reputation, experience, and investment philosophy and policies. BlackRock’s investment process draws on the broad reach of BlackRock’s global fixed income platform, leveraging research teams and relationships to develop an investment perspective. BlackRock’s municipal bond investment approach represents collaboration between the management team, which is responsible for setting the top-down asset allocation framework for portfolio construction, and municipal credit research analysts who are responsible for bottom-up idea generation. The Sub-adviser’s fundamental municipal credit analysis process combines quantitative financial analysis with qualitative perspective on municipal governments and revenue sectors. The percentage of Municipal Bond Fund's assets allocated to BlackRock is targeted at 100%. The Fund will continue to invest at least 80% of its assets in municipal bonds that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax). The Fund may invest up to 20% of its assets in municipal bonds that are rated below investment grade by a nationally recognized statistical rating organization, or, if unrated, of equivalent quality as determined by the Sub-adviser. The Fund’s average portfolio duration, as calculated by the Sub-adviser, will typically be maintained at +/- 3 years of the average benchmark duration, which is the average duration of all the constituent bonds in the Bloomberg Barclays U.S. Municipal Bond Index. The Sub-adviser will seek to target the average duration of the benchmark which varies over time and may be impacted by market conditions. The Sub-adviser may leverage the Fund’s assets through the use of proceeds received through tender option bond transactions and may use derivative instruments to hedge the Fund’s investments or to seek to enhance its returns. At the Meeting, the Board, including the Independent Trustees, considered and approved the Advisory Agreement with the Sub-adviser. In determining whether to approve the Advisory Agreement, the Board considered the due diligence materials prepared by the Manager and other information, which included a copy of the Advisory Agreement including the sub-investment advisory fee to be paid to the Sub-adviser, and information regarding: (i) the process by which the Manager selected and recommended the Sub-adviser for Board approval; (ii) the nature, extent and quality of the services the Sub-adviser would provide to Municipal Bond Fund; and (iii) the Sub-adviser’s (A) investment management business, personnel, and operations, (B) portfolio trading policies and practices, (C) compliance program, (D) historical performance returns managing investment mandates similar to the Municipal Bond Fund’s investment mandate, with such performance compared to a relevant index and Morningstar and Lipper fund categories, and (E) financial condition. The Independent Trustees considered the Manager’s favorable assessment of the nature and quality of the sub-advisory services expected to be provided to the Municipal Bond Fund by the Sub-adviser. The Independent Trustees also discussed the acceptability of the terms of the Advisory Agreement, noting the substantial similarity to the terms of the investment advisory agreements with the Trust’s other sub-advisers. The Independent Trustees also considered whether there were any ancillary benefits that may accrue to the Sub-adviser as a result of its relationship with the Municipal Bond Fund. The relevant materials and information were provided to the Board, including all of the Independent Trustees, in advance of and at the Meeting. Representatives from the Sub-adviser also made a presentation to and responded to questions from the Board. The Independent Trustees were assisted in their review by Fund counsel and independent legal counsel and met with independent legal counsel in executive sessions separate from representatives of the Manager and the Sub-adviser. The Independent Trustees concluded, with respect to the Sub-adviser, that the nature, extent and quality of the investment advisory services expected to be provided by the Sub-adviser were adequate and appropriate in light of the Sub-adviser’s expertise and the qualifications of its investment personnel in providing portfolio management services to other similar investment portfolios and the performance history of those portfolios, the Sub-adviser’s portfolio management and research resources to be applied in managing a the Municipal Bond Fund’s assets, the Sub-adviser’s compliance program and the Manager’s recommendation to engage the Sub-adviser, and supported a decision to approve the Advisory Agreement. Because the Sub-adviser was a newly-appointed sub-adviser for the Municipal Bond Fund, the Independent Trustees could not consider its investment performance in managing the Municipal Bond Fund’s portfolio as a factor in evaluating the Advisory Agreement during the Meeting. The Independent Trustees discussed with representatives of the Manager the investment strategy

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to be employed by the Sub-adviser in the management of the Municipal Bond Fund’s assets. The Independent Trustees noted the historical performance returns of the Sub-adviser managing investment mandates similar to the Municipal Bond Fund’s investment mandate, with such performance compared to a relevant index and Morningstar and Lipper fund categories, and the Manager’s experience and reputation in selecting, evaluating and overseeing investment advisers. Based on these factors, the Board supported a decision to approve the Advisory Agreement. The Independent Trustees reviewed and considered the sub-advisory fee payable under the Advisory Agreement to the Sub-adviser. The Independent Trustees noted that the proposed fee payable to the Sub-adviser would be paid by the Manager, and not the Municipal Bond Fund, and, thus, would not impact the fees paid by the Municipal Bond Fund. The Independent Trustees concluded that the proposed fee payable to the Sub-adviser by the Manager with respect to the assets to be allocated to the Sub-adviser was reasonable and appropriate. The Independent Trustees recognized that, because the Sub-adviser’s fee would be paid by the Manager, and not the Municipal Bond Fund, an analysis of profitability was more appropriate in the context of the Board’s consideration of the management agreement between the Trust and the Manager. The Board received and considered a profitability analysis of the Manager with respect to the replacement of the Municipal Bond Fund’s then-current sub-adviser with the Sub-adviser and determined that the Manager’s profitability was not excessive in light of the nature, extent and quality of the services to be provided to the Municipal Bond Fund by the Manager and the new Sub-adviser. Similarly, the Independent Trustees recognized that, because the Sub-adviser’s fee would be paid by the Manager, and not the Municipal Bond Fund, an analysis of economies of scale in connection with the engagement of the Sub-adviser was more appropriate in the context of the Board’s consideration of the management agreement between the Trust and the Manager. Accordingly, consideration of economies of scale with respect to the Sub-adviser was not relevant to the Independent Trustees’ determination to approve the Advisory Agreement. The Independent Trustees also concluded that any benefits that were expected to accrue to the Sub-adviser by virtue of its relationship with the Municipal Bond Fund were reasonable. After full consideration of the factors discussed above, with no single factor identified as being of paramount importance, the Board, including the Independent Trustees, with the assistance of Fund counsel and independent legal counsel, concluded that the approval of the Advisory Agreement was in the best interests of the Municipal Bond Fund, and approved the Advisory Agreement. The Manager entered into the Advisory Agreement with BlackRock, which began managing the assets of the Municipal Bond Fund allocated to it by the Manager on February 25, 2019. The Manager determined that 100% of the Municipal Bond Fund’s assets should be allocated to the BlackRock. The Advisory Agreement The terms of the Advisory Agreement were similar in all material respects to the agreements between the Manager and the Trusts’ other sub-advisers. The Advisory Agreement provides that, subject to the supervision of the Board and the Manager, the Sub-Adviser shall manage the investments of the portion of the Fund’s assets allocated to it in accordance with the Fund’s investment objective, policies and restrictions, and in compliance with the requirements applicable to registered investment companies and such other limitations as the Manager may institute. The Advisory Agreement provides that the Sub-adviser will exercise its best judgment in rendering its services to the Municipal Bond Fund and, except as may otherwise be required by the 1940 Act or the rules thereunder or other applicable law, will not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund or the Manager in connection with the matters to which the Advisory Agreement relates, except a loss resulting from the Sub-adviser’s willful misfeasance, bad faith or gross negligence in the performance of its duties or from reckless disregard by it of its obligations and duties under the Advisory Agreement. The Advisory Agreement sets forth information about the term of the Advisory Agreement and the fees to be paid to the Proposed Municipal Bond Fund Sub-advisers by the Manager thereunder. The Municipal Bond Fund has agreed to pay the Manager a management fee at the annual rate of 0.40% of the value of the Municipal Bond Fund’s average daily net assets, from which, the Manager will pay the Municipal Bond Fund’s Sub-adviser. Effective January 1, 2019, the Manager has contractually agreed to waive fees and reimburse expenses for a period of one year in order to keep the Municipal Bond Fund’s management fees from exceeding the total amount of sub-advisory fees paid by the Manager plus 0.20% based on average net assets. This contractual waiver will only apply if the Municipal Bond Fund’s total management fees exceed the total amount of sub-advisory fees paid by the Manager plus 0.20% and will not affect the Fund’s total management fees if they are less than such amount. This fee waiver and reimbursement agreement shall remain in effect until January 1, 2020. Additional Information about BlackRock BlackRock’s offices are located at Park Ave. Plaza, 55 East 52nd Street, New York, NY 10055. BlackRock is registered with the SEC as an investment adviser. Different portfolio management teams at Blackrock currently manage allocated portions of the assets

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of Large Cap Equity Fund, Small-Mid Cap Equity Fund, International Equity Fund, Emerging Markets Equity Fund and Core Fixed Income Fund, each a series of the Trust. Listed below are the names and principal occupations of the senior personnel of BlackRock responsible for the day-to-day management of the Municipal Bond Fund’s assets allocated to BlackRock. The principal business address of each person, as it relates to his or her duties at BlackRock, is the same as that of BlackRock.

Name

Position with BlackRock Years with BlackRock

Michael Kalinoski, CFA® Director and Portfolio Manager 20Kevin Maloney, CFA® Vice President and Portfolio Manager 8

Comparable Funds BlackRock currently manages other investment companies or accounts having similar investment objectives and strategies as the Municipal Bond Fund. Payments of Commissions to Affiliated Brokers During the fiscal year ended August 31, 2018, the Municipal Bond Fund did not make any brokerage commission payments to Morgan Stanley & Co. Purchases of Securities by Trustees None of the Trustee of the Trust owns any securities issued by BlackRock.

******** FUND-LEVEL OWNERSHIP/SHARES OUTSTANDING

Fund

Total Net Assets as of August 31, 2018

Shares Outstanding as August 31, 2018

Municipal Bond Fund $63,391,300.72 6,958,389.95 To the knowledge of the Manager, as of August 31, 2018, the Board members and officers of the Trust, as a group, owned of record less than 1% of the outstanding shares of the Municipal Bond Fund. Beneficial Share Ownership As of August 31, 2018, there were no shareholders who owned beneficially 5% or more of the shares of the Funds. OTHER INFORMATION Manager Consulting Group Advisory Services LLC, a business of Morgan Stanley Smith Barney Holdings LLC, serves as the investment adviser for the Fund and is located at 2000 Westchester Avenue, Purchase, NY 10577. The Manager selects and oversees professional money managers (the sub-advisers) who are responsible for investing the assets of the Fund. Distributor The Trust’s distributor, Morgan Stanley Smith Barney LLC, is located at 2000 Westchester Avenue, Purchase, NY 10577. Administrator Brown Brothers Harriman & Co. serves as the administrator to the Funds and is located at 50 Post Office Square, Boston, MA 02110.

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Householding Only one copy of this informational letter is mailed to households, even if more than one person in a household is a Fund shareholder of record, unless the Fund has received instructions to the contrary. If you need additional copies of this informational letter, or if you do not want the mailing of an informational letter to be combined with those for other members of your household in the future, or if you are receiving multiple copies and would rather receive just one copy for the household, please contact the Trust by calling 1-888-454-3965 or by writing to the Trust at 2000 Westchester Avenue, Purchase, NY 10577. Annual/Semi-Annual Reports

Shareholders can obtain a copy of the Trust’s most recent Annual Report and any Semi-Annual Report following the Annual Report, without charge, by calling 1-888-454-3965 or by writing to the Trust at 2000 Westchester Avenue, Purchase, NY 10577.

ON BEHALF OF THE BOARD OF TRUSTEES OF MORGAN STANLEY PATHWAY FUNDS

Eric MetalloSecretaryMarch 29, 2019