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R E S E A R C H EQUITY MODEL PORTFOLIO SOLUTIONS DECEMBER 1, 2014

Morgan Stanley Wealth Management is the trade name of Morgan Stanley Smith Barney LLC, a registered broker-dealer in the United States. Morgan Stanley Wealth Management does and seeks to do business with companies covered in Morgan Stanley Wealth Management Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Wealth Management Research. Investors should consider Morgan Stanley Wealth Management Research as only a single factor in making their investment decision.

For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report.

Equity Model Portfolio Solutions Monthly

NORTH AMERICA DANIEL SKELLY Morgan Stanley Wealth Management [email protected] +1 212 296-5109 SACHIN MANCHANDA Morgan Stanley Wealth Management [email protected] +1 212 296-5065 KATY ZHAO Morgan Stanley Wealth Management [email protected] +1 212 296-5105 ELIZABETH HARROW Morgan Stanley Wealth Management [email protected] +1 212 296-5118

Equity Model Portfolios Monthly What's Inside? For each of the five individual equity-oriented portfolios, we summarize monthly changes, and show recent performance.

November changes by portfolio:

US Model Added: 2% position in American Express (AXP) – 11/3 Removed: 2% position in eBay (EBAY) – 11/3

Global Equity No changes this month

Dividend Equity No changes this month

US All Cap Growth Added: 4% position in Nike (NKE) – 11/3 Removed: 4% position in eBay (EBAY) – 11/3 4

US Long Run Deep Value Added: 2.5% position in Occidental Petroleum (OXY) –

11/3 Increased: 2.5% position in Macy’s (M) to 5% – 11/3 Removed: 5.0% position in Consolidated Edison (ED) – 11/3

R E S E A R C H EQUITY MODEL PORTFOLIO SOLUTIONS MONTHLY DECEMBER 1, 2014

Please refer to important information, disclosures and qualifications at the end of this material.

2

Table of Contents US Model p.3

Global Equity p.5

Dividend Equity p.7

US All Cap Growth p.9

US Long Run Deep Value p.11

Disclosures p.15



3

US Model Number of stocks currently included: 40 Average yield as of November 28, 2014: 2.1% Portfolio turnover as of (2013): 31%

Total Return Performance Through 11/28/2014

Period

S&P 500 Rates of Returns US Model Index November 2.0% 2.7% Rolling Quarter 3.5% 3.7% Year-to-Date 15.8% 14.0% 1 Year 19.5% 16.9% 3 Years Annualized 19.6% 20.9% 5 Years Annualized 14.5% 16.0% Since 12/31/1995 (Ann.) 10.0% 8.6% Inception (Cumulative) 508.3% 376.7%

November Top 3 Bottom 3 Return Contributors

Source: Company data, Morgan Stanley Wealth Management Investment Resources

Results shown represent total return (includes dividends) and exclude brokerage commissions. Had the results reflected brokerage commissions, the performance would have been lower. Past performance is no guarantee of future results. These figures are audited by Zacks Investment Research at year end, but are not intended to demonstrate actual returns from any individual portfolio.

Source: Morgan Stanley Wealth Management Investment Resources, Bloomberg as of November 28, 2014

0.20.1

0.1

-0.2-0.3

-0.3

TMO ORCL V SLB WMB CVX

US Model S&P 500 Difference

1996* 26.8% 22.9% 3.9%

1997 31.2% 33.4% -2.2%

1998 29.4% 28.6% 0.8%

1999 19.6% 21.0% -1.4%

2000 -0.1% -9.2% 9.1%

2001 -9.5% -11.8% 2.3%

2002 -20.6% -22.1% 1.5%

2003 30.3% 28.7% 1.6%

2004 10.3% 10.9% -0.6%

2005 15.6% 4.9% 10.6%

2006 13.3% 15.8% -2.5%

2007 13.5% 5.5% 8.0%

2008 -35.5% -37.0% 1.5%

2009 23.8% 26.5% -2.7%

2010 12.1% 15.1% -3.0%

2011 1.9% 2.1% -0.2%

2012 16.0% 16.0% 0.0%

2013 26.1% 32.4% -6.3%



4

Portfolio Holdings

Source: Company data, Morgan Stanley & Co. LLC (Morgan Stanley), Morgan Stanley Wealth Management Investment Resources, Bloomberg as of November 28, 2014 Morgan Stanley Research Ratings Definitions: NC–Not Covered by Morgan Stanley Research Stock Ratings: OW–Overweight; EW–Equal-weight; UW–Underweight; NR–Not Rated; Morgan Stanley Industry View: A–Attractive; I–In-Line; C–Cautious Other: NA–Not Available/Not Applicable; NM–Not Meaningful; e–Estimate ++Rating for this company has been removed from consideration in this report because, under applicable law and/or Morgan Stanley & Co. policy, Morgan Stanley & Co. may be precluded from issuing such information with respect to this company at this time. For valuation methodology and risks associated with any Morgan Stanley & Co. price targets above, please email [email protected] with a request for valuation methodology and risks on a particular stock. Please visit https://www.morganstanley.com/online/researchdisclosures for more information about Morgan Stanley’s stock rating system.

US ModelMS MS Rec'd Mkt

Indus Stock Wt. 11/28/14 MS 14e 15e Ind. Cap Incl.Sector/Ticker/Company View Rating (%) Price Tgt. 13a 14e 15e P/E P/E Yld. ($ bns) Date

Consumer Discretionary (10.0% vs. S&P 500 12.0%)CBS CBS A O 2.0 55 63 3.02 3.17 3.52 17 16 1.1 28.4 9/4/14HD Home Depot I E 2.0 99 103 3.76 4.52 5.22 22 19 1.9 131.0 8/27/13HOT Starwood Hotels A O 2.0 79 95 2.99 2.82 3.47 28 23 1.8 14.1 11/1/13TWX Time Warner Inc. A O 2.0 85 90 3.77 4.19 4.78 20 18 1.5 71.4 2/28/14YUM Yum! Brands I E 2.0 77 71 3.02 3.28 3.68 24 21 2.1 33.8 8/5/10

Consumer Staples (9.0% vs. S&P 500 9.9%)COST Costco I O 2.0 142 145 4.50 4.80 5.38 30 26 1.0 62.2 7/15/14EL Estee Lauder I O 2.0 74 83 2.55 2.98 3.26 25 23 1.3 28.1 3/12/13PEP PepsiCo I O 2.0 100 103 4.37 4.60 4.90 22 20 2.6 149.8 7/26/02PM Philip Morris Intl I O 3.0 87 92 5.40 5.09 4.96 17 18 4.6 135.1 3/28/08

Energy (13.0% vs. S&P 500 8.4%)CVX Chevron I E 4.0 109 130 11.00 9.85 7.03 11 15 3.9 205.8 3/16/11EOG EOG Resources A O 2.0 87 121 4.11 5.26 3.33 16 26 0.8 47.5 10/7/14KMI Kinder Morgan A E 2.0 41 43 0.30 1.27 1.58 NM NM 4.3 42.5 8/20/12SLB Schlumberger A O 2.0 86 123 4.79 5.57 5.77 15 15 1.9 110.6 9/23/09WMB Williams Cos A O 3.0 52 63 0.86 0.78 1.39 NM NM 4.4 38.7 5/1/12

Finance (18.0% vs. S&P 500 16.3%)ACE ACE Limited I O 2.0 114 121 9.35 9.57 9.72 12 12 2.3 37.9 5/31/13AXP American Express A O 2.0 92 110 4.86 5.55 6.00 17 15 1.1 95.6 11/3/14BLK BlackRock I O 3.0 359 400 16.59 19.62 21.26 18 17 2.1 60.1 11/15/11JPM J.P.Morgan Chase A O 4.0 60 76 4.65 5.49 6.20 11 10 2.7 224.9 7/9/03PLD Prologis I O 2.0 42 48 0.95 0.82 0.50 NM NM 3.1 21.1 10/2/13PRU Prudential Financial I O 3.0 85 102 9.67 9.41 9.80 9 9 2.7 38.9 6/12/14WFC Wells Fargo A E 2.0 54 58 3.89 4.05 4.10 13 13 2.6 282.6 10/17/12

Health Care (13.0% vs. S&P 500 14.3%)

ABT Abbott Laboratories I O 2.0 45 48 2.03 2.27 2.27 20 20 2.0 67.0 5/14/14AMGN Amgen I O 2.0 165 165 7.60 8.50 9.20 19 18 1.5 125.7 4/8/14MCK McKesson I O 2.0 211 205 7.34 10.58 12.16 20 17 0.5 48.9 10/1/14BAX Baxter I E 2.0 73 75 4.69 4.87 4.71 15 16 2.8 39.6 7/27/04UNH UnitedHealth I O 2.0 99 84 5.50 5.65 6.12 17 16 1.5 94.7 11/26/13TMO Thermo Fisher Scientific I O 3.0 129 146 5.42 6.92 7.97 19 16 0.5 51.7 3/13/12

Industrials (12.0% vs. S&P 500 10.4%)DHR Danaher I O 3.0 84 88 3.41 3.68 4.01 23 21 0.5 58.7 4/30/13HON Honeywell I O 3.0 99 108 4.97 5.55 6.11 18 16 2.1 77.6 9/23/10UNP Union Pacific A O 3.0 117 139 4.71 5.64 6.80 21 17 1.7 103.8 7/30/13UTX United Technologies I O 3.0 110 125 6.21 6.85 7.24 16 15 2.1 100.4 3/24/06

Information Technology (17.0% vs. S&P 500 20.0%)AAPL Apple C O 4.0 119 126 5.87 7.00 8.54 17 14 1.6 697.5 5/29/09GOOGL Google A E 3.0 549 600 23.30 25.00 28.64 22 19 0.0 369.8 4/3/13MA Mastercard I O 2.0 87 93 2.62 3.02 3.55 29 25 0.5 101.0 7/15/14ORCL Oracle I E 3.0 42 45 2.79 2.90 3.18 15 13 1.1 187.9 8/8/08QCOM Qualcomm C E 2.0 73 75 4.51 5.26 5.37 14 14 2.3 121.2 1/11/10V Visa I O 3.0 258 270 7.97 9.47 10.97 27 24 0.7 160.5 4/15/10

Materials (2.0% vs. S&P 500 3.2%)MON Monsanto A O 2.0 120 150 4.67 5.21 6.24 23 19 1.6 58.0 6/14/13

Telecom Services (2.0% vs. S&P 500 2.4%)CCI Crown Castle International C O 2.0 83 91 0.26 0.94 1.38 NM NM 3.9 27.7 12/15/11

Utilities (2.0% vs. S&P 500 3.1%)NEE NextEra Energy I O 2.0 104 119 4.96 5.19 5.61 20 19 2.8 45.6 2/7/14

Cash 2.0%

ModelWare EPS

mailto:[email protected]

https://www.morganstanley.com/online/researchdisclosures



5

Global Equity Number of stocks currently included: 35

Average yield as of November 28, 2014 2.1%

Portfolio turnover as of (2013): 30%


Period Global MSCI

Rates of Returns Equity ACWI November 1.3% 1.7% Rolling Quarter 0.1% -0.8% Year-to-Date 7.0% 6.8% 1 Year 8.9% 8.7% 3 Years Annualized 15.4% 15.4% 5 Years Annualized 10.4% 10.6% Since 02/27/2004 (Ann.) 8.1% 7.5% Inception (Cumulative) 132.2% 116.7%

November Top 3 & Bottom 3 Return Contributors


Results shown represent total return (includes dividends) and exclude brokerage commissions. Had the results reflected brokerage commissions, the performance would have been lower. Past performance is no guarantee of future results. These figures are audited by Zacks Investment Research at year end, but are not intended to demonstrate actual returns from any individual portfolio. * Inception years represent the stub period return based on the individual portfolio’s inception date.

Source: Morgan Stanley Wealth Management Investment Resources, Bloomberg as of November 28, 2014

0.2 0.2 0.2

-0.4-0.5 -0.5

ACT AMZN TMO SLB NBL SMFG

Global Equity MSCI ACWI Difference

2004* 12.6% 11.8% 0.8%

2005 12.6% 11.4% 1.2%

2006 23.1% 21.5% 1.6%

2007 13.6% 12.2% 1.4%

2008 -36.3% -41.9% 5.6%

2009 27.7% 35.4% -7.7%

2010 9.7% 13.1% -3.4%

2011 -3.9% -6.9% 3.0%

2012 15.1% 16.8% -1.7%

2013 24.0% 23.4% 0.6%



6

Portfolio Holdings


Global EquityMS MS Rec'd Mkt

Indus Stock Weight 11/28/14 MS 14e 15e Cap Incl.Sector/Ticker/Company View Rating (%) Price Tgt. 13a 14e 15e P/E P/E ($ bns) Date

Consumer Discretionary (13.0% vs. MSCI ACWI 11.9%)AMZN Amazon.com ++ O 3.0 339 420 2.34 1.67 3.52 NM NM 0.0 156.8 10/1/14HMC Honda Motor A O 3.0 30 35 2.53 3.06 3.12 10 10 2.4 54.9 2/15/13TV Televisa I O 3.0 37 38 1.06 0.82 1.51 45 25 0.4 21.6 9/7/12DIS Walt Disney A E 2.0 93 95 3.70 4.45 4.88 21 19 0.9 156.9 8/3/09YUM Yum! Brands I E 2.0 77 71 3.02 3.28 3.68 24 21 2.1 33.8 5/5/09

Consumer Staples (9.0% vs. MSCI ACWI 9.8%)BUD Anheuser-Busch InBev NC NC 3.0 117 NC NC NC NC NC NC 2.1 188.1 9/17/09BTI British American Tobacco A E 2.0 118 110 7.17 6.54 7.01 18 17 2.6 110.1 7/9/08DEO Diageo NC NC 2.0 123 NC NC NC NC NC NC 3.3 77.4 8/18/05PEP PepsiCo I O 2.0 100 103 4.37 4.60 4.90 22 20 2.6 149.8 2/27/04

Energy (11.0% vs. MSCI ACWI 8.0%)CVX Chevron I E 3.0 109 130 11.00 9.85 7.03 11 15 3.9 205.8 4/19/13NBL Noble Energy A O 3.0 49 75 2.89 2.46 2.29 20 21 1.5 17.8 8/13/13NOV National Oilwell Varco A E 2.0 67 78 5.24 6.00 6.52 11 10 2.7 28.9 10/27/14SLB Schlumberger A O 3.0 86 123 4.79 5.57 5.77 15 15 1.9 110.6 2/27/04

Finance (24.0% vs. MSCI ACWI 21.5%)AXP American Express A O 3.0 92 110 4.86 5.55 6.00 17 15 1.1 95.6 9/11/14BAC Bank of America A O 4.0 17 21 0.91 0.46 1.67 37 10 1.2 179.2 11/19/13BBVA BBVA I O 3.0 11 14 0.52 0.51 0.87 21 12 3.8 66.1 5/22/14BLK BlackRock I O 3.0 359 400 16.59 19.62 21.26 18 17 2.1 60.1 2/24/12HDB HDFC Bank A O 2.0 53 53 1.64 1.96 2.52 27 21 0.6 42.9 12/19/13UBS UBS I O 3.0 18 23 1.28 1.42 1.65 13 11 NA 62.5 5/30/13MET MetLife I O 2.0 56 62 5.61 5.75 5.85 10 10 2.5 63.2 3/24/11SMFG Sumitomo Mitsui Financial A O 4.0 8 10 1.32 0.95 0.84 8 9 3.4 53.5 7/19/13

Health Care (11.0% vs. MSCI ACWI 11.7%)ABT Abbott Laboratories I O 3.0 45 48 2.03 2.27 2.27 20 20 2.0 67.0 2/13/14ACT Actavis I O 3.0 271 266 9.50 NA NA NA NA 0.0 71.7 3/13/13TMO Thermo Fisher Scientific I O 3.0 129 146 5.42 6.92 7.97 19 16 0.5 51.7 10/1/14PFE Pfizer I E 2.0 31 32 2.22 2.25 2.16 14 14 3.3 196.3 3/31/14

Industrials (12.0% vs. MSCI ACWI 10.4%)ABB ABB I E 3.0 22 25 1.29 1.23 1.51 18 15 3.5 51.9 8/19/14CP Canadian Pacific Rail A O 3.0 193 285 6.45 8.50 11.43 23 17 0.7 32.9 11/29/12RTN Raytheon NC NC 3.0 107 NC NC NC NC NC NC 2.3 32.9 4/28/14UTX United Technologies I O 3.0 110 125 6.21 6.85 7.24 16 15 2.1 100.4 2/14/08

Information Technology (12.0% vs. MSCI ACWI 13.8%)AAPL Apple C O 3.0 119 126 5.87 7.00 8.54 17 14 1.6 697.5 10/11/11GOOGL Google A E 3.0 549 600 23.30 25.00 28.64 22 19 0.0 369.8 10/1/14SAP SAP AG I O 3.0 70 83 4.63 4.31 4.67 16 15 1.9 86.4 7/18/12V Visa I O 3.0 258 270 7.97 9.47 10.97 27 24 0.7 160.5 1/21/10

Materials (3.0% vs. MSCI ACWI 5.4%)MON Monsanto A O 3.0 120 150 4.67 5.21 6.24 23 19 1.6 58.0 9/18/13

Telecom Services (2.0% vs. MSCI ACWI 3.9%)VOD Vodafone A O 2.0 37 37 2.16 2.30 2.18 16 17 3.1 96.9 10/20/10

Utilities (0.0% vs. MSCI ACWI 3.3%)

Cash 3.0%

ModelWare EPSInd. Yld.





7

Dividend Equity Number of stocks currently included: 20 Average yield as of November 28, 2014: 3.0% Portfolio turnover as of (2013): 39%

Total Return Performance Through 11/28/2014 Period Dividend DVG Rates of Returns Equity Index November 2.1% 3.2% Rolling Quarter 4.3% 4.9% Year-to-Date 12.8% 9.9% 1 Year 15.1% 12.1% 3 Years Annualized 18.1% 16.9% 5 Years Annualized 14.5% 14.3% Since 07/11/2005 (Ann.) 8.6% 7.2% Inception (Cumulative) 116.8% 91.8%


Source: Morgan Stanley Wealth Management, Investment Resources, Bloomberg as of November 28, 2014


Results shown represent total return (includes dividends) and exclude brokerage commissions. Had the results reflected brokerage commissions, the performance would have been lower. Past performance is no guarantee of future results. These figures are audited by Zacks Investment Research at year end, but are not intended to demonstrate actual returns from any individual portfolio. * Inception years represent the stub period return based on the individual portfolio’s inception date.

0.5 0.4 0.4

-0.5-0.6

-0.8

LB M AAPL WMB CVX SDRL

Dividend STEP S&P 500 DVG

2005* 1.5% 3.3% 1.6%

2006 21.6% 15.8% 13.4%

2007 11.4% 5.5% 5.8%

2008 -32.5% -37.0% -26.4%

2009 19.5% 26.4% 19.6%

2010 13.5% 15.1% 14.9%

2011 7.5% 2.1% 6.3%

2012 12.7% 16.0% 11.7%

2013 26.3% 32.4% 29.0%



8

Portfolio Holdings


Dividend EquityMS MS Rec'd Mkt


Consumer Discretionary (10% vs. DVG Index 9.1%)M Macy's I O 5.0 65 66 4.00 4.35 4.90 15 13 1.9 22.9 9/11/14LB L Brands I O 5.0 81 84 3.05 3.31 3.75 24 22 1.7 23.7 1/15/13

Consumer Staples (5% vs. DVG Index 21.7%)PM Philip Morris Intl I O 5.0 87 92 5.40 5.09 4.96 17 18 4.6 135.1 11/20/12

Energy (12.5% vs. DVG Index 8.4%)CVX Chevron I E 5.0 109 130 11.00 9.85 7.03 11 15 3.9 205.8 8/21/09SDRL Seadrill A O 2.5 15 24 2.64 2.68 3.02 5 5 0.0 7.2 7/12/11WMB Williams Cos A O 5.0 52 63 0.86 0.78 1.39 NM NM 4.4 38.7 1/18/12

Finance (20.0% vs. DVG Index 7.1%)ACE ACE Limited I O 5.0 114 121 9.35 9.57 9.72 12 12 2.3 37.9 5/16/13BLK BlackRock I O 5.0 359 400 16.59 19.62 21.26 18 17 2.1 60.1 4/9/13JPM J.P.Morgan Chase A O 5.0 60 76 4.65 5.49 6.20 11 10 2.7 224.9 3/22/11PRU Prudential Financial I O 5.0 85 102 9.67 9.41 9.80 9 9 2.7 38.9 6/3/14

Health Care (10% vs. DVG Index 11.3%)AMGN Amgen I O 5.0 165 165 7.60 8.50 9.20 19 18 1.5 125.7 10/1/14BMY Bristol Myers Squibb I E 5.0 59 60 1.82 1.79 1.52 33 39 2.4 98.0 8/3/11

Industrials (12.5% vs. DVG Index 21.7%)ETN Eaton Corp I O 5.0 68 83 4.13 4.58 5.01 15 14 2.9 32.2 10/2/13RTN Raytheon NC NC 5.0 107 NC NC NC NC NC NC 2.3 32.9 4/9/14UTX United Technologies I O 2.5 110 125 6.21 6.85 7.24 16 15 2.1 100.4 8/17/12

Information Technology (15% vs. DVG Index 11.2%)AAPL Apple C O 5.0 119 126 5.87 7.00 8.54 17 14 1.6 697.5 5/22/12ADP Automatic Data Processing I E 5.0 86 77 3.02 3.01 3.11 28 28 2.3 41.3 2/12/14LLTC Linear Technology I O 5.0 46 46 1.77 2.04 2.22 23 21 2.3 11.0 7/29/14

Materials (0.0% vs. DVG Index 8.5%)

Telecommunication Services (5.0% vs. DVG Index 0.1%)TU TELUS C E 5.0 38 40 2.04 2.14 2.30 18 17 3.7 23.2 10/23/13

Utilities (5% vs. DVG Index 0.8%)NEE NextEra Energy I O 5.0 104 119 4.96 5.19 5.61 20 19 2.8 45.6 9/5/13

Cash 5.0%

ModelWare EPS





9

US All Cap Growth


Period US All Cap Russell 1000 Rates of Returns Growth Growth November 2.3% 3.2%



Source: Company data, Morgan Stanley Wealth Management Investment Resources as of November 28, 2014

0.3 0.30.2

-0.3

-0.5

-0.7

VNTV LB AMZN GILD SLB APC

Number of stocks currently included: 30

Average yield as of November 28, 2014: 1.1%

Portfolio turnover as of (2013): 34%



10

Portfolio Holdings


US All Cap GrowthMS MS Rec'd Mkt


Consumer Discretionary (22.0% vs. Russell 1000 Growth 17.8%)AMZN Amazon.com ++ O 4.0 339 420 2.34 1.67 3.52 NM NM 0.0 156.8 10/1/14DIS Walt Disney A E 3.0 93 95 3.70 4.45 4.88 21 19 0.9 156.9 10/1/14FOXA 21st Century Fox A O 2.0 37 39 1.29 1.62 1.82 23 20 0.7 78.2 10/1/14KORS Michael Kors I O 2.0 77 105 2.93 4.03 4.65 19 16 0.0 15.8 10/1/14LB L Brands I O 3.0 81 84 3.05 3.31 3.75 24 22 1.7 23.7 10/1/14NKE Nike I O 4.0 99 105 2.93 3.31 3.93 30 25 1.1 85.5 11/3/14SBUX Starbucks I O 4.0 81 88 2.31 2.75 3.28 30 25 1.6 60.8 10/1/14

Consumer Staples (2.0% vs. Russell 1000 Growth 10.4%)COST Costco I O 2.0 142 145 4.50 4.80 5.38 30 26 1.0 62.2 10/1/14

Energy (12.0% vs. Russell 1000 Growth 5.2%)EOG EOG Resources A O 2.0 87 121 4.11 5.26 3.33 16 26 0.8 47.5 10/1/14OKE ONEOK A O 2.0 54 67 1.72 1.58 1.88 NM NM 4.4 11.3 10/1/14SLB Schlumberger A O 4.0 86 123 4.79 5.57 5.77 15 15 1.9 110.6 10/1/14APC Anadarko Petroleum A O 4.0 79 120 4.02 4.64 2.36 17 33 1.4 40.1 10/1/14

Finance (8.0% vs. Russell 1000 Growth 5.2%)AXP American Express A O 4.0 92 110 4.86 5.55 6.00 17 15 1.1 95.6 10/1/14GS Goldman Sachs A E 4.0 188 200 15.59 17.88 18.09 11 10 1.3 84.8 10/1/14

Health Care (17.0% vs. Russell 1000 Growth 14.0%)A Agilent Technologies I E 2.0 43 43 1.56 1.58 1.79 27 24 0.9 14.3 10/1/14AMGN Amgen I O 4.0 165 165 7.60 8.50 9.20 19 18 1.5 125.7 10/1/14BAX Baxter I E 3.0 73 75 4.69 4.87 4.71 15 16 2.8 39.6 10/1/14GILD Gilead Sciences I E 4.0 100 81 2.05 8.31 9.57 12 10 0.0 151.3 10/1/14PRGO Perrigo I O 2.0 160 177 6.16 5.99 8.07 27 20 0.3 22.6 10/1/14Q Quintiles I O 2.0 58 62 2.10 2.66 3.01 22 19 0.0 7.4 10/1/14

Industrials (10.0% vs. Russell 1000 Growth 12.0%)DHR Danaher I O 4.0 84 88 3.41 3.68 4.01 23 21 0.5 58.7 10/1/14GWR Genesee & Wyoming A O 4.0 99 117 4.27 4.19 5.00 24 20 0.0 5.3 10/1/14HUB/B Hubbell I O 2.0 107 123 5.46 5.32 5.98 20 18 2.1 6.3 10/1/14

Information Technology (20.0% vs. Russell 1000 Growth 28.1%)AAPL Apple C O 6.0 119 126 5.87 7.00 8.54 17 14 1.6 697.5 10/1/14GOOGL Google A E 3.0 549 600 23.30 25.00 28.64 22 19 0.0 369.8 10/1/14LLTC Linear Technology I O 2.0 46 46 1.77 2.04 2.22 23 21 2.3 11.0 10/1/14VNTV Vantiv I O 5.0 34 38 1.56 1.87 2.16 18 16 0.0 4.9 10/1/14V Visa I O 4.0 258 270 7.97 9.47 10.97 27 24 0.7 160.5 10/1/14

Materials (2.0% vs.Russell 1000 Growth 4.0%)MON Monsanto A O 2.0 120 150 4.67 5.21 6.24 23 19 1.6 58.0 10/1/14

Telecommunication Services (4.0% vs. Russell 1000 Growth 2.3%)SBAC SBA Communications C O 4.0 122 126 (0.44) (1.57) (1.86) NM NM 0.0 15.7 10/1/14

Utilities (0.0% vs. Russell 1000 Growth 0.1%)

Cash 3.0%

ModelWare EPS





11

US Long Run Deep Value Number of stocks currently included: 20 Average yield as of November 28, 2014: 2.4% Portfolio turnover as of (2013): 38%

Total Return Performance Through 11/28/2014 Period US Long Run Russell 1000 Rates of Returns Deep Value Value November 2.0% 2.1%



Source: Company data, Morgan Stanley Wealth Management Investment Resources, as of November 28, 2014

0.5

0.3 0.3

-0.3 -0.3-0.4

M HPQ ACT PRU CVX LYB



12

Portfolio Holdings


US Long Run Deep ValueMS MS Rec'd Mkt

Industry Stock Wt. 11/28/14 MS 14e 15e Ind. Cap Incl.Sector/Ticker/Company View Rating (%) Price Tgt. 13a 14e 15e P/E P/E Yld. ($ bns) Date

Consumer Discretionary (10% vs. Russell 1000 Value 6.2%)CBS CBS A O 5.0 55 63 3.02 3.17 3.52 17 16 1.1 28.4 10/1/14M Macy's I O 5.0 65 66 4.00 4.35 4.90 15 13 1.9 22.9 10/1/14

Consumer Staples (4% vs. Russell 1000 Value 7.1%)KRFT Kraft I O 4.0 60 60 2.85 3.15 3.40 19 18 3.7 35.4 10/1/14

Energy (12.5% vs. Russell 1000 Value 12.2%)CVX Chevron I E 5.0 109 130 11.00 9.85 7.03 11 15 3.9 205.8 10/1/14MPC Marathon Petroleum I O 5.0 90 115 6.71 7.58 9.26 12 10 2.2 25.2 10/1/14OXY Occidental Petroleum A O 2.5 80 98 6.96 6.14 3.73 13 21 3.6 61.9 11/3/14

Finance (25.5% vs. Russell 1000 Value 29.3%)JPM J.P.Morgan Chase A O 7.5 60 76 4.65 5.49 6.20 11 10 2.7 224.9 10/1/14BBT BB&T A E 4.0 38 44 2.92 2.88 3.13 13 12 2.6 27.1 10/1/14BLK BlackRock I O 5.0 359 400 16.59 19.62 21.26 18 17 2.1 60.1 10/1/14PRU Prudential Financial I O 5.0 85 102 9.67 9.41 9.80 9 9 2.7 38.9 10/1/14WFC Wells Fargo A E 4.0 54 58 3.89 4.05 4.10 13 13 2.6 282.6 10/1/14

Health Care (14.5% vs. Russell 1000 Value 13.6%)ACT Actavis I O 3.0 271 266 9.50 NA NA NA NA 0.0 71.7 10/1/14PFE Pfizer I E 5.0 31 32 2.22 2.25 2.16 14 14 3.3 196.3 10/1/14UNH UnitedHealth I O 6.5 99 84 5.50 5.65 6.12 17 16 1.5 94.7 10/1/14

Industrials (20% vs. Russell 1000 Value 10.2%)ETN Eaton Corp I O 5.0 68 83 4.13 4.58 5.01 15 14 2.9 32.2 10/1/14HON Honeywell I O 5.0 99 108 4.97 5.55 6.11 18 16 2.1 77.6 10/1/14TYC Tyco International I O 5.0 43 47 1.70 1.66 2.27 26 19 1.7 18.0 10/1/14UNP Union Pacific A O 5.0 117 139 4.71 5.64 6.80 21 17 1.7 103.8 10/1/14

Information Technology (9% vs. Russell 1000 Value 8.8%)HPQ Hewlett-Packard C O 5.0 39 40 3.66 3.82 4.02 10 10 1.6 72.9 10/1/14ORCL Oracle I E 4.0 42 45 2.79 2.90 3.18 15 13 1.1 187.9 10/1/14

Materials (2.5% vs. Russell 1000 Value 3.2%)LYB LyondellBasell Industries A O 2.5 79 120 6.79 8.29 8.00 10 10 3.6 39.5 10/1/14

Telecommunication Services (0.0% vs. Russell 1000 Value 2.2%)

Utilities (0% vs. Russell 1000 Value 6.4%)

Cash 2.0%

ModelWare EPS





13

Other companies mentioned in this report: Consolidated Edison (ED; $63.15; MS & Co.: Underweight/In-Line) eBay (EBAY; $54.88; MS & Co.: Underweight/No Rating) Prices as of market close on November 28, 2014. Morgan Stanley is acting as financial advisor to Bristol Myers Squibb Company ("Bristol Myers") in connection with the transfer of $1.4 Billion of U.S. pension obligations to The Prudential Insurance Company of America, a Prudential Financial Inc. company, as announced September 30, 2014. The transaction is subject to customary closing conditions. Bristol Myers has agreed to pay fees to Morgan Stanley for its financial services. Please refer to the notes at the end of the report. Morgan Stanley is acting as financial advisor to Abbott Laboratories in relation to the proposed sale of its non-US developed markets branded generic drug business to Mylan, Inc. ("Mylan") as announced on 14th July 2014. The proposed transaction is subject to approval by Mylan shareholders, certain closing conditions, including regulatory clearances, and other customary closing conditions. This report and the information provided herein is not intended to (i) provide voting advice, (ii) serve as an endorsement of the proposed transaction, or (iii) result in the procurement, withholding or revocation of a proxy or any other action by a security holder. Abbott Laboratories has agreed to pay fees to Morgan Stanley for its financial services. Please refer to the notes at the end of the report.



14

Equity Model Portfolio Performance Calculation Methodology Equity Model Portfolio performance data is compiled with two major goals in mind: 1) to be in accordance with CFA Institute Global Investment Performance Standards (GIPS) and 2) to mirror, to the extent possible, the performance that individual investors are likely to experience if they follow our change recommendations. We believe our calculations are as conservative as possible. Changes are announced prior to the market open; however, performance is based on the closing price of the security on the day that the change is announced.

For example: if company XYZ announces an earnings shortfall after the market closes on a Monday and we suggest removing the stock on Tuesday morning (never the preferred outcome, of course), we absorb the likely decline in value of the stock during Tuesday’s trading by taking Tuesday’s 4 p.m. market closing price in New York (or the relevant local exchange closing time in the case of foreign stocks).

Dividend Treatment The performance of each of the Equity Model Portfolio is based on total return, which includes dividends. All benchmark data is also calculated on a total return basis. The performance calculation assumes that dividends paid on securities in a portfolio are incorporated into each individual security on the ex-dividend date.

For Example: Stock XYZ has appreciated from $10 to $11 in value (a 10% return) and pays a $0.10 dividend over the year (a 1% dividend yield). At the end of the year the total return on this position is 11% (10% price appreciation + 1% dividend)

Rebalancing Method When a change is made to an Equity Model Portfolio, there is an automatic rebalancing of all the other equity portfolio positions back to the recommended weight in the model. This is in accordance with CFA Institute recommendation for Model Portfolios. “On-Change” rebalancing removes any equity “drift” that might have happened between the last change in the portfolio and the current one.

For Example: Let’s assume that 5% weighted ABC and 5% weighted XYZ are added on the same day to a portfolio. ABC subsequently does very well relative to its benchmark, while XYZ performs very poorly. Until another change is made in the portfolio, stock ABC’s effective weight will surpass 5% while stock XYZ’s effective weight will drift below 5%. Assume a change is then made to a stock other than ABC or XYZ. Upon that day’s close of trading, ABC and XYZ will automatically revert to their former 5% weightings.

Cash Position The Equity Model Portfolios will often maintain modest cash positions (Typically between 0% and 7.5% across the portfolios). Cash returns incorporate an assumed investment in 90-day U.S. Treasury bills as of the last business day of the month prior to the performance calculation date as published by the Federal Reserve.

Other Corporate Actions Occasional stock spin-offs are credited post the spin date as shares of the original position that was recommended. The spun off entity is liquidated and proceeds are reinvested into the original entity as well as any cash in lieu of shares proceeds.



15

Disclosure Section The results shown include dividends and exclude brokerage commissions. Had the results reflected brokerage commissions, the performance would have been lower. These returns were calculated based on the assumption that every recommendation made by the Equity Model Portfolio Solutions team was executed on the date the recommendation was made and at that trading day's closing price. Moreover, the methodology assumes that, every time a change to the portfolio was made, the portfolio was rebalanced to continue to be weighted in the proportions recommended by the team. Since clients are required to make independent decisions as to whether to follow the team's recommendations and/or to rebalance their portfolios, the performance of client holdings may be better or worse than those reported for the portfolio. Past performance is no guarantee of future results. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this portfolio. This report does not provide individually tailored investment advice and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The securities in Equity Model Portfolios are selected and monitored on an ongoing basis by members of the Equity Model Portfolio Solutions team and may be purchased in a single transaction as individual stocks. Periodically, changes to the portfolios are recommended; clients then decide whether the recommendation makes sense for their particular financial situation. After a client purchases a portfolio, the same stocks will remain in his or her account unless individual stocks are bought or sold in response to subsequent changes in the portfolio or as otherwise individually determined by the client. Such transactions will incur applicable commission charges. Clients should seek advice from their financial advisor as to the suitability of investing in any of the securities or investment strategies discussed in this report. Financial Advisors and Private Wealth Advisors may use Equity Model Portfolios as a resource in formulating investment advice for their advisory clients, provided that they consider all other relevant factors and sources of information in tailoring their advice to a particular client, taking into consideration the client's investment objectives, risk tolerance and investment horizons.

The information and opinions in Morgan Stanley Wealth Management Research were prepared by Morgan Stanley Smith Barney LLC under its trade name Morgan Stanley Wealth Management.

For important disclosures (including copies of historical disclosures) regarding the securities and/or companies that are the subject of this Morgan Stanley Wealth Management Research product, please contact Morgan Stanley Wealth Management Research, 522 Fifth Ave., New York, N.Y. 10036, Attention: Research Management. In addition, the same important disclosures, with the exception of the historical disclosures, are contained on the Firm's disclosure website at https://www.morganstanley.com/online/researchdisclosures. Historical disclosures will be provided upon request back to June 1, 2009.

Morgan Stanley Wealth Management Analyst Certification The Morgan Stanley Wealth Management research analysts principally responsible for the preparation and content of all or any identified portion of this research report, hereby certify that their views about the securities and/or companies discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report. Unless otherwise stated, the individuals listed on the cover page of this report are Morgan Stanley Wealth Management research analysts.

Global Research Conflict Management Policy Morgan Stanley Wealth Management has a Conflict Management policy available at: https://www.morganstanley.com/online/researchconflictpolicies

Important US Regulatory Disclosures on Subject Issuers The following analyst or strategist (or a household member) owns securities (or related derivatives), ETFs, or Closed-End funds that he or she covers or recommends in Morgan Stanley Wealth Management Research: Katy Zhao - APPLE INC., MICHAEL KORS HOLDINGS LIMITED, QUALCOMM INCORPORATED; Sachin Manchanda - ORACLE CORPORATION. Morgan Stanley Wealth Management or an affiliate beneficially owned 1% or more of a class of common equity securities of: ABBOTT LABORATORIES, ACE LIMITED, ACTAVIS PLC, AMAZON.COM, INC., ANADARKO PETROLEUM CORPORATION, APPLE INC., AUTOMATIC DATA PROCESSING, INC., BANCO BILBAO VIZCAYA ARGENTARIA SOCIEDAD ANONIMA, BAXTER INTERNATIONAL INC., BLACKROCK, INC., BRISTOL-MYERS SQUIBB COMPANY, BRITISH AMERICAN TOBACCO P.L.C., CANADIAN PACIFIC RAILWAY LIMITED, CBS CORPORATION, COSTCO WHOLESALE CORPORATION, Crown Castle Corp., DANAHER CORPORATION, DIAGEO PLC, EATON CORPORATION, EOG RESOURCES INC., GOOGLE, INC., GRUPO TELEVISA SAB, HDFC BANK LIMITED, HONEYWELL INTERNATIONAL INC., KINDER MORGAN, INC., L BRANDS, INC., LINEAR TECHNOLOGY CORPORATION, MACY'S, INC., MARATHON PETROLEUM CORPORATION, MASTERCARD INC., MICHAEL KORS HOLDINGS LIMITED, MONSANTO COMPANY, NEXTERA ENERGY, INC., NIKE, INC., ONEOK INC., PEPSICO INC., PHILIP MORRIS INTERNATIONAL INC., Prologis, Inc., PRUDENTIAL FINANCIAL INC., RAYTHEON COMPANY, SAP SE, SCHLUMBERGER NV, SEADRILL LIMITED, STARBUCKS CORPORATION, STARWOOD HOTELS & RESORTS WORLDWIDE, INC.,


https://www.morganstanley.com/online/researchconflictpolicies



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SUMITOMO MITSUI FINANCIAL GROUP, INC., THE ESTEE LAUDER COMPANIES INC., THE WILLIAMS COMPANIES, INC., THERMO FISHER SCIENTIFIC INC., TIME WARNER INC., TWENTY-FIRST CENTURY FOX, INC., UNITED TECHNOLOGIES CORPORATION, VISA INC., VODAFONE GROUP PLC, YUM! BRANDS, INC.. Within the last 12 months, Morgan Stanley Wealth Management or an affiliate received compensation for investment banking services from the following issuers (if the security is an ETF or Closed-End Fund, the compensation is from the fund's investment manager or advisor): ACE LIMITED, AMGEN INC., ANADARKO PETROLEUM CORPORATION, AUTOMATIC DATA PROCESSING, INC., BANCO BILBAO VIZCAYA ARGENTARIA SOCIEDAD ANONIMA, BANK OF AMERICA CORPORATION, BB&T CORPORATION, BLACKROCK, INC., BRISTOL-MYERS SQUIBB COMPANY, CBS CORPORATION, CHEVRON CORPORATION, CONSOLIDATED EDISON, INC., Crown Castle Corp., DIAGEO PLC, EBAY INC., GENESEE & WYOMING INC., GILEAD SCIENCES INC., GOOGLE, INC., HEWLETT-PACKARD COMPANY, HONDA MOTOR CO., LTD., HONEYWELL INTERNATIONAL INC., JPMORGAN CHASE & CO., KINDER MORGAN, INC., LYONDELLBASELL INDUSTRIES NV, MARATHON PETROLEUM CORPORATION, MASTERCARD INC., METLIFE, INC., MONSANTO COMPANY, NEXTERA ENERGY, INC., NOBLE ENERGY, INC., ONEOK INC., ORACLE CORPORATION, PEPSICO INC., PERRIGO COMPANY PUBLIC LIMITED COMPANY, Prologis, Inc., PRUDENTIAL FINANCIAL INC., QUINTILES TRANSNATIONAL HOLDINGS, INC., SAP SE, SEADRILL LIMITED, STARBUCKS CORPORATION, THE GOLDMAN SACHS GROUP INC., THE HOME DEPOT, INC., THE WALT DISNEY COMPANY, THE WILLIAMS COMPANIES, INC., THERMO FISHER SCIENTIFIC INC., TIME WARNER INC., TWENTY-FIRST CENTURY FOX, INC., TYCO INTERNATIONAL LTD., UBS AG, UNION PACIFIC CORPORATION, UNITED TECHNOLOGIES CORPORATION, VANTIV INC., VODAFONE GROUP PLC, WELLS FARGO & COMPANY. In the next 3 months, Morgan Stanley Wealth Management or an affiliate will seek compensation for investment banking services from the following issuers (if the security is an ETF or Closed-End Fund, the compensation is from the fund's investment manager or advisor): ABB LTD., ABBOTT LABORATORIES, ACE LIMITED, ACTAVIS PLC, AGILENT TECHNOLOGIES INC., AMAZON.COM, INC., AMERICAN EXPRESS COMPANY, AMGEN INC., ANADARKO PETROLEUM CORPORATION, ANHEUSER BUSCH INBEV SA/NV, APPLE INC., AUTOMATIC DATA PROCESSING, INC., BANCO BILBAO VIZCAYA ARGENTARIA SOCIEDAD ANONIMA, BANK OF AMERICA CORPORATION, BAXTER INTERNATIONAL INC., BB&T CORPORATION, BLACKROCK, INC., BRISTOL-MYERS SQUIBB COMPANY, BRITISH AMERICAN TOBACCO P.L.C., CANADIAN PACIFIC RAILWAY LIMITED, CBS CORPORATION, CHEVRON CORPORATION, CONSOLIDATED EDISON, INC., COSTCO WHOLESALE CORPORATION, Crown Castle Corp., DANAHER CORPORATION, DIAGEO PLC, EATON CORPORATION, EBAY INC., EOG RESOURCES INC., GENESEE & WYOMING INC., GILEAD SCIENCES INC., GOOGLE, INC., GRUPO TELEVISA SAB, HDFC BANK LIMITED, HEWLETT-PACKARD COMPANY, HONDA MOTOR CO., LTD., HONEYWELL INTERNATIONAL INC., HUBBELL INCORPORATED, JPMORGAN CHASE & CO., KINDER MORGAN, INC., KRAFT FOODS GROUP, INC., L BRANDS, INC., LINEAR TECHNOLOGY CORPORATION, LYONDELLBASELL INDUSTRIES NV, MACY'S, INC., MARATHON PETROLEUM CORPORATION, MASTERCARD INC., MCKESSON CORPORATION, METLIFE, INC., MICHAEL KORS HOLDINGS LIMITED, MONSANTO COMPANY, NATIONAL OILWELL VARCO, INC., NEXTERA ENERGY, INC., NIKE, INC., NOBLE ENERGY, INC., OCCIDENTAL PETROLEUM CORPORATION, ONEOK INC., ORACLE CORPORATION, PEPSICO INC., PERRIGO COMPANY PUBLIC LIMITED COMPANY, PFIZER INC., Prologis, Inc., PRUDENTIAL FINANCIAL INC., QUALCOMM INCORPORATED, QUINTILES TRANSNATIONAL HOLDINGS, INC., RAYTHEON COMPANY, SAP SE, SBA COMMUNICATIONS CORPORATION, SCHLUMBERGER NV, SEADRILL LIMITED, STARBUCKS CORPORATION, STARWOOD HOTELS & RESORTS WORLDWIDE, INC., SUMITOMO MITSUI FINANCIAL GROUP, INC., TELUS CORPORATION, THE ESTEE LAUDER COMPANIES INC., THE GOLDMAN SACHS GROUP INC., THE HOME DEPOT, INC., THE WALT DISNEY COMPANY, THE WILLIAMS COMPANIES, INC., THERMO FISHER SCIENTIFIC INC., TIME WARNER INC., TWENTY-FIRST CENTURY FOX, INC., TYCO INTERNATIONAL LTD., UBS AG, UNION PACIFIC CORPORATION, UNITED TECHNOLOGIES CORPORATION, UNITEDHEALTH GROUP INCORPORATED, VANTIV INC., VISA INC., VODAFONE GROUP PLC, WELLS FARGO & COMPANY, YUM! BRANDS, INC.. Within the last 12 months, Morgan Stanley Wealth Management or an affiliate managed or co-managed a public offering (or 144a offering) for: ACE LIMITED, AMGEN INC., ANADARKO PETROLEUM CORPORATION, BANCO BILBAO VIZCAYA ARGENTARIA SOCIEDAD ANONIMA, BANK OF AMERICA CORPORATION, BB&T CORPORATION, BLACKROCK, INC., CHEVRON CORPORATION, CONSOLIDATED EDISON, INC., Crown Castle Corp., DIAGEO PLC, EBAY INC., GILEAD SCIENCES INC., GOOGLE, INC., HEWLETT-PACKARD COMPANY, HONDA MOTOR CO., LTD., JPMORGAN CHASE & CO., KINDER MORGAN, INC., LYONDELLBASELL INDUSTRIES NV, MARATHON PETROLEUM CORPORATION, MASTERCARD INC., METLIFE, INC., MONSANTO COMPANY, NEXTERA ENERGY, INC., NOBLE ENERGY, INC., ORACLE CORPORATION, PEPSICO INC., Prologis, Inc., PRUDENTIAL FINANCIAL INC., QUINTILES TRANSNATIONAL HOLDINGS, INC., SAP SE, SEADRILL LIMITED, STARBUCKS CORPORATION, SUMITOMO MITSUI FINANCIAL GROUP, INC., THE GOLDMAN SACHS GROUP INC., THE HOME DEPOT, INC., THE WALT DISNEY COMPANY, THE WILLIAMS COMPANIES, INC., THERMO FISHER SCIENTIFIC INC., TIME WARNER INC., TWENTY-FIRST CENTURY FOX, INC., UBS AG, UNION PACIFIC CORPORATION, WELLS FARGO & COMPANY. Within the last 12 months, Morgan Stanley Wealth Management or an affiliate has provided or is providing investment banking services to, or has an investment banking client relationship with, the following issuers (if the security is an ETF or Closed-End Fund, the services were or are being provided to, or the relationship is with, the fund's investment manager or advisor): ABB LTD., ABBOTT LABORATORIES, ACE LIMITED, ACTAVIS PLC, AGILENT TECHNOLOGIES INC., AMAZON.COM, INC., AMERICAN EXPRESS COMPANY, AMGEN INC., ANADARKO PETROLEUM CORPORATION, ANHEUSER BUSCH INBEV SA/NV, APPLE INC., AUTOMATIC DATA PROCESSING, INC., BANCO BILBAO VIZCAYA ARGENTARIA SOCIEDAD ANONIMA, BANK OF AMERICA CORPORATION, BAXTER INTERNATIONAL INC., BB&T CORPORATION, BLACKROCK, INC., BRISTOL-MYERS SQUIBB COMPANY, BRITISH AMERICAN TOBACCO P.L.C., CANADIAN PACIFIC RAILWAY LIMITED, CBS CORPORATION, CHEVRON CORPORATION, CONSOLIDATED EDISON, INC., COSTCO WHOLESALE CORPORATION, Crown Castle Corp., DANAHER CORPORATION, DIAGEO PLC, EATON CORPORATION, EBAY INC., EOG RESOURCES INC., GENESEE & WYOMING INC., GILEAD SCIENCES INC., GOOGLE, INC., GRUPO TELEVISA SAB, HDFC BANK LIMITED, HEWLETT-PACKARD COMPANY, HONDA MOTOR CO., LTD., HONEYWELL INTERNATIONAL INC., HUBBELL INCORPORATED, JPMORGAN CHASE & CO., KINDER MORGAN, INC., KRAFT FOODS GROUP, INC., L BRANDS, INC., LINEAR TECHNOLOGY CORPORATION, LYONDELLBASELL INDUSTRIES NV, MACY'S, INC., MARATHON PETROLEUM CORPORATION, MASTERCARD INC., MCKESSON CORPORATION, METLIFE, INC., MICHAEL KORS HOLDINGS LIMITED, MONSANTO COMPANY, NATIONAL OILWELL VARCO, INC., NEXTERA ENERGY, INC., NIKE, INC., NOBLE ENERGY, INC.,



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OCCIDENTAL PETROLEUM CORPORATION, ONEOK INC., ORACLE CORPORATION, PEPSICO INC., PERRIGO COMPANY PUBLIC LIMITED COMPANY, PFIZER INC., Prologis, Inc., PRUDENTIAL FINANCIAL INC., QUALCOMM INCORPORATED, QUINTILES TRANSNATIONAL HOLDINGS, INC., RAYTHEON COMPANY, SAP SE, SBA COMMUNICATIONS CORPORATION, SCHLUMBERGER NV, SEADRILL LIMITED, STARBUCKS CORPORATION, STARWOOD HOTELS & RESORTS WORLDWIDE, INC., SUMITOMO MITSUI FINANCIAL GROUP, INC., TELUS CORPORATION, THE ESTEE LAUDER COMPANIES INC., THE GOLDMAN SACHS GROUP INC., THE HOME DEPOT, INC., THE WALT DISNEY COMPANY, THE WILLIAMS COMPANIES, INC., THERMO FISHER SCIENTIFIC INC., TIME WARNER INC., TWENTY-FIRST CENTURY FOX, INC., TYCO INTERNATIONAL LTD., UBS AG, UNION PACIFIC CORPORATION, UNITED TECHNOLOGIES CORPORATION, UNITEDHEALTH GROUP INCORPORATED, VANTIV INC., VISA INC., VODAFONE GROUP PLC, WELLS FARGO & COMPANY, YUM! BRANDS, INC.. Within the last 12 months, Morgan Stanley Wealth Management has received compensation for products or services other than investment banking services from the following issuers (if the security is an ETF or Closed-End Fund, the compensation is from the fund's investment manager or advisor): BLACKROCK, INC., JPMORGAN CHASE & CO., METLIFE, INC., PRUDENTIAL FINANCIAL INC., THE GOLDMAN SACHS GROUP INC., UBS AG, WELLS FARGO & COMPANY. Within the last 12 months, Morgan Stanley Wealth Management has either provided or is providing non-investment banking, securities-related services to and/or in the past has entered into an agreement to provide services or has a client relationship with the following issuers (if the security is an ETF or Closed-End Fund, the services were or are being provided to, or the agreement is with, the fund's investment manager or advisor): ABB LTD., AGILENT TECHNOLOGIES INC., AMAZON.COM, INC., AMERICAN EXPRESS COMPANY, APPLE INC., AUTOMATIC DATA PROCESSING, INC., BANCO BILBAO VIZCAYA ARGENTARIA SOCIEDAD ANONIMA, BANK OF AMERICA CORPORATION, BB&T CORPORATION, BLACKROCK, INC., BRISTOL-MYERS SQUIBB COMPANY, CBS CORPORATION, CHEVRON CORPORATION, CONSOLIDATED EDISON, INC., COSTCO WHOLESALE CORPORATION, DANAHER CORPORATION, DIAGEO PLC, GILEAD SCIENCES INC., GOOGLE, INC., HEWLETT-PACKARD COMPANY, HONEYWELL INTERNATIONAL INC., JPMORGAN CHASE & CO., KINDER MORGAN, INC., KRAFT FOODS GROUP, INC., L BRANDS, INC., LINEAR TECHNOLOGY CORPORATION, LYONDELLBASELL INDUSTRIES NV, MARATHON PETROLEUM CORPORATION, MASTERCARD INC., MCKESSON CORPORATION, METLIFE, INC., MICHAEL KORS HOLDINGS LIMITED, MONSANTO COMPANY, OCCIDENTAL PETROLEUM CORPORATION, ORACLE CORPORATION, PFIZER INC., PRUDENTIAL FINANCIAL INC., QUALCOMM INCORPORATED, RAYTHEON COMPANY, SBA COMMUNICATIONS CORPORATION, THE GOLDMAN SACHS GROUP INC., THE HOME DEPOT, INC., THE WALT DISNEY COMPANY, THE WILLIAMS COMPANIES, INC., TIME WARNER INC., TWENTY-FIRST CENTURY FOX, INC., TYCO INTERNATIONAL LTD., UBS AG, UNITEDHEALTH GROUP INCORPORATED, WELLS FARGO & COMPANY, YUM! BRANDS, INC.. An affiliate of Morgan Stanley Wealth Management serves as corporate broker to: DIAGEO PLC. An affiliate of Morgan Stanley Wealth Management has a significant financial interest in relation to the following issuers (if the security is an ETF or Closed-End Fund, the significant financial is in relation to the fund's investment manager or advisor): ABBOTT LABORATORIES, ACE LIMITED, AGILENT TECHNOLOGIES INC., AMAZON.COM, INC., AMERICAN EXPRESS COMPANY, AMGEN INC., ANADARKO PETROLEUM CORPORATION, ANHEUSER BUSCH INBEV SA/NV, APPLE INC., AUTOMATIC DATA PROCESSING, INC., BANCO BILBAO VIZCAYA ARGENTARIA SOCIEDAD ANONIMA, BANK OF AMERICA CORPORATION, BAXTER INTERNATIONAL INC., BB&T CORPORATION, BLACKROCK, INC., BRISTOL-MYERS SQUIBB COMPANY, BRITISH AMERICAN TOBACCO P.L.C., CANADIAN PACIFIC RAILWAY LIMITED, CBS CORPORATION, CHEVRON CORPORATION, CONSOLIDATED EDISON, INC., COSTCO WHOLESALE CORPORATION, Crown Castle Corp., DANAHER CORPORATION, DIAGEO PLC, EATON CORPORATION, EBAY INC., EOG RESOURCES INC., GENESEE & WYOMING INC., GILEAD SCIENCES INC., GOOGLE, INC., GRUPO TELEVISA SAB, HDFC BANK LIMITED, HEWLETT-PACKARD COMPANY, HONEYWELL INTERNATIONAL INC., HUBBELL INCORPORATED, JPMORGAN CHASE & CO., KINDER MORGAN, INC., KRAFT FOODS GROUP, INC., L BRANDS, INC., LYONDELLBASELL INDUSTRIES NV, MACY'S, INC., MARATHON PETROLEUM CORPORATION, MASTERCARD INC., MCKESSON CORPORATION, METLIFE, INC., MONSANTO COMPANY, NATIONAL OILWELL VARCO, INC., NEXTERA ENERGY, INC., NIKE, INC., NOBLE ENERGY, INC., OCCIDENTAL PETROLEUM CORPORATION, ONEOK INC., ORACLE CORPORATION, PEPSICO INC., PERRIGO COMPANY PUBLIC LIMITED COMPANY, PFIZER INC., PHILIP MORRIS INTERNATIONAL INC., PRUDENTIAL FINANCIAL INC., RAYTHEON COMPANY, SAP SE, SCHLUMBERGER NV, STARBUCKS CORPORATION, STARWOOD HOTELS & RESORTS WORLDWIDE, INC., SUMITOMO MITSUI FINANCIAL GROUP, INC., TELUS CORPORATION, THE GOLDMAN SACHS GROUP INC., THE HOME DEPOT, INC., THE WALT DISNEY COMPANY, THE WILLIAMS COMPANIES, INC., THERMO FISHER SCIENTIFIC INC., TIME WARNER INC., TYCO INTERNATIONAL LTD., UBS AG, UNION PACIFIC CORPORATION, UNITED TECHNOLOGIES CORPORATION, UNITEDHEALTH GROUP INCORPORATED, VODAFONE GROUP PLC, WELLS FARGO & COMPANY, YUM! BRANDS, INC.. For an explanation of the determination of significant financial interest, please refer to the applicable policies for managing conflicts of interest, which can be found at https://www.morganstanley.com/online/researchconflictpolicies. The research analysts or strategists principally responsible for the preparation of Morgan Stanley Wealth Management Research have received compensation based upon various factors, including quality of research, investor client feedback, competitive factors, and firm profitability or revenues (which include fixed income trading and capital markets profitability or revenues). Research analysts' or strategists' compensation is not linked to the profitability or revenues of particular capital markets transactions performed by Morgan Stanley Wealth Management or the profitability or revenues of particular fixed income trading desks. Morgan Stanley Wealth Management and its affiliates do business that relates to companies/instruments covered in Morgan Stanley Wealth Management Research. Morgan Stanley Wealth Management and/or its affiliates sells to and buys from customers the securities/instruments of issuers covered in this Morgan Stanley Wealth Management Research report on a principal basis.

Certain disclosures listed above are also for compliance with applicable regulations in non-US jurisdictions.

https://www.morganstanley.com/online/researchconflictpolicies



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Closed-End Fund Rating System Morgan Stanley Wealth Management only rates Closed-End Funds ("CEF"). For CEFs, Morgan Stanley Wealth Management uses a relative rating system using the terms Overweight, Equal-weight, Underweight, and Not Covered (see definitions below). Morgan Stanley Wealth Management does not assign ratings of Buy, Hold or Sell to the CEFs we cover. Overweight, Equal-weight, and Underweight are not the equivalent of buy, hold and sell. Investors should carefully read the definitions of all ratings used in Morgan Stanley Wealth Management Research. In addition, since Morgan Stanley Wealth Management Research contains more complete information concerning the analyst's view, investors should carefully read Morgan Stanley Wealth Management Research, in its entirety, and not infer the contents from the ratings alone. In any case, ratings (or research) should not be used or relied upon as investment advice. An investor's decision to buy or sell a security or fund should depend on individual circumstances (such as the investor's existing holdings) and other considerations.

Closed-End Fund Ratings Definitions Overweight (O): The closed-end fund's total return is expected to exceed the average total return of the analyst's industry coverage universe, on a risk-adjusted basis, over the next 12-18 months. Equal-weight (E): The closed-end fund's total return is expected to be in line with the average total return of the analyst's industry coverage universe, on a risk-adjusted basis, over the next 12-18 months. Underweight (U): The closed end fund's total return is expected to be below the average total return of the analyst's industry coverage universe, on a risk-adjusted basis, over the next 12-18 months. Not Covered (NC): Indicates that the analyst does not cover the fund.

Closed-End Fund Ratings Distribution (as of date November 30, 2014)

Morgan Stanley Wealth Management only rates CEFs. Thus, this Ratings Distribution table only displays the distribution data for the rated CEFs. For disclosure purposes only (in accordance with FINRA requirements), we include the category of Buy, Hold, and Sell alongside our ratings of Overweight, Equal-weight, and Underweight. Morgan Stanley Wealth Management does not assign ratings of Buy, Hold or Sell to the CEFs we cover. Overweight, Equal-weight, and Underweight are not the equivalent of buy, hold, and sell but represent recommended relative weightings (see definition below). To satisfy regulatory requirements, we correspond Overweight, our most positive stock rating, with a buy recommendation; we correspond Equal-weight to hold and Underweight to sell recommendations, respectively.

CEF Coverage Universe Investment Banking Clients (IBC)

Closed-End Fund (CEF) Rating Category Count % of Total Count % of Total IBC % of Rating Category

Overweight/Buy 28 29.1% 18 33.3% 64.3%

Equal-weight/Hold 47 49.0% 25 46.3% 53.2%

Underweight/Sell 21 21.9% 11 20.4% 52.4%

Total 96 100.0% 54 100.0%

Data includes CEFs currently assigned ratings. An investor's decision to buy or sell a fund should depend on individual circumstances (such as an investor's existing holdings) and other considerations. The Investment Banking Clients data above applies only to Morgan Stanley Wealth Management's CEF coverage universe. The data indicates those CEF investment managers for whom Morgan Stanley Wealth Management, provided investment banking services within the previous 12 months.

Other Important Disclosures This Morgan Stanley Wealth Management Research does not provide individually tailored investment advice. Morgan Stanley Wealth Management Research has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley Wealth Management recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. The securities, instruments, or strategies discussed in Morgan Stanley Wealth Management Research may not be suitable for all investors, and certain investors may not be eligible to purchase or participate in some or all of them. Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Financial Advisors do not provide legal or tax advice. Each client should always consult his/her personal tax and/or legal advisor for information concerning his/her individual situation and to learn about any potential tax or other implications that may result from acting on a particular recommendation.



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