Highland Opportunities & Income (NYSE: HFRO) gets 5.1% Morgan Stanley stake

Rhea-AI Filing Summary

Highland Opportunities & Income Fund (HFRO) received an amended ownership report from Morgan Stanley and Morgan Stanley Smith Barney LLC. They report beneficial ownership of 2,822,774 common shares, representing 5.1% of the fund’s outstanding class.

The firms report shared voting power over 26 shares and shared dispositive power over 2,822,774 shares, with no sole voting or dispositive power. They certify the position is held in the ordinary course of business and not for the purpose of changing or influencing control of HFRO.

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13G

UNDER THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 2)

HIGHLAND OPPORTUNITIES & INCOME FUND

(Name of Issuer)

Common Shares of Beneficial Interest

(Title of Class of Securities)

43010E404

(CUSIP Number)

12/31/2025

(Date of Event Which Requires Filing of this Statement)

Check the appropriate box to designate the rule pursuant to which this Schedule is filed:

Rule 13d-1(b)

Rule 13d-1(c)

Rule 13d-1(d)

SCHEDULE 13G

CUSIP No. 43010E404

1

Names of Reporting Persons

Morgan Stanley

2

Check the appropriate box if a member of a Group (see instructions)

(a)
(b)

3

Sec Use Only

4

Citizenship or Place of Organization

DELAWARE

Number of Shares Beneficially Owned by Each Reporting Person With:

5	Sole Voting Power 0.00
6	Shared Voting Power 26.00
7	Sole Dispositive Power 0.00
8	Shared Dispositive Power 2,822,774.00

9

Aggregate Amount Beneficially Owned by Each Reporting Person

2,822,774.00

10

Check box if the aggregate amount in row (9) excludes certain shares (See Instructions)

11

Percent of class represented by amount in row (9)

5.1 %

12

Type of Reporting Person (See Instructions)

HC, CO

SCHEDULE 13G

CUSIP No. 43010E404

1

Names of Reporting Persons

Morgan Stanley Smith Barney LLC

2

Check the appropriate box if a member of a Group (see instructions)

(a)
(b)

3

Sec Use Only

4

Citizenship or Place of Organization

DELAWARE

Number of Shares Beneficially Owned by Each Reporting Person With:

5	Sole Voting Power 0.00
6	Shared Voting Power 26.00
7	Sole Dispositive Power 0.00
8	Shared Dispositive Power 2,822,774.00

9

Aggregate Amount Beneficially Owned by Each Reporting Person

2,822,774.00

10

Check box if the aggregate amount in row (9) excludes certain shares (See Instructions)

11

Percent of class represented by amount in row (9)

5.1 %

12

Type of Reporting Person (See Instructions)

BD, IA, CO

SCHEDULE 13G

Item 1.
(a)	Name of issuer: HIGHLAND OPPORTUNITIES & INCOME FUND
(b)	Address of issuer's principal executive offices: 300 CRESCENT COURT, SUITE 700, DALLAS, TX, 75201
Item 2.
(a)	Name of person filing: 1: Morgan Stanley 2: Morgan Stanley Smith Barney LLC
(b)	Address or principal business office or, if none, residence: 1: 1585 Broadway, New York, NY 10036 ;2: 1585 Broadway, New York, NY 10036
(c)	Citizenship: 1: Delaware 2: Delaware
(d)	Title of class of securities: Common Shares of Beneficial Interest
(e)	CUSIP No.: 43010E404
Item 3.	If this statement is filed pursuant to §§ 240.13d-1(b) or 240.13d-2(b) or (c), check whether the person filing is a:
(a)	Broker or dealer registered under section 15 of the Act (15 U.S.C. 78o);
(b)	Bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c);
(c)	Insurance company as defined in section 3(a)(19) of the Act (15 U.S.C. 78c);
(d)	Investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8);
(e)	An investment adviser in accordance with § 240.13d-1(b)(1)(ii)(E);
(f)	An employee benefit plan or endowment fund in accordance with § 240.13d-1(b)(1)(ii)(F);
(g)	A parent holding company or control person in accordance with § 240.13d-1(b)(1)(ii)(G);
(h)	A savings associations as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813);
(i)	A church plan that is excluded from the definition of an investment company under section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3);
(j)	A non-U.S. institution in accordance with § 240.13d-1(b)(1)(ii)(J). If filing as a non-U.S. institution in accordance with § 240.13d-1(b)(1)(ii)(J), please specify the type of institution:
(k)	Group, in accordance with Rule 240.13d-1(b)(1)(ii)(K).
Item 4.	Ownership
(a)	Amount beneficially owned: See the response(s) to Item 9 on the attached cover page(s).
(b)	Percent of class: 5.1 %
(c)	Number of shares as to which the person has:
	(i) Sole power to vote or to direct the vote: See the response(s) to Item 5 on the attached cover page(s).
	(ii) Shared power to vote or to direct the vote: See the response(s) to Item 6 on the attached cover page(s).
	(iii) Sole power to dispose or to direct the disposition of: See the response(s) to Item 7 on the attached cover page(s).
	(iv) Shared power to dispose or to direct the disposition of: See the response(s) to Item 8 on the attached cover page(s).
Item 5.	Ownership of 5 Percent or Less of a Class.
	Not Applicable
Item 6.	Ownership of more than 5 Percent on Behalf of Another Person.
	Not Applicable
Item 7.	Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on by the Parent Holding Company or Control Person.
	If a parent holding company has filed this schedule, pursuant to Rule 13d-1(b)(ii)(G), so indicate under Item 3(g) and attach an exhibit stating the identity and the Item 3 classification of the relevant subsidiary. If a parent holding company has filed this schedule pursuant to Rule 13d-1(c) or Rule 13d-1(d), attach an exhibit stating the identification of the relevant subsidiary. See Exhibit 99.2
Item 8.	Identification and Classification of Members of the Group.
	Not Applicable
Item 9.	Notice of Dissolution of Group.
	Not Applicable

Item 10.

Certifications:

By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect, other than activities solely in connection with a nomination under ?? 240.14a-11. * In Accordance with the Securities and Exchange Commission Release No. 34-39538 (January 12, 1998) (the "Release"), this filing reflects the securities beneficially owned, or that may be deemed to be beneficially owned, by certain operating units (collectively, the "MS Reporting Units") of Morgan Stanley and its subsidiaries and affiliates (collectively, "MS"). This filing does not reflect securities, if any, beneficially owned by any operating units of MS whose ownership of securities is disaggregated from that of the MS Reporting Units in accordance with the Release.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Morgan Stanley

Signature:	Chris O'Hara
Name/Title:	Authorized Signatory, Morgan Stanley
Date:	02/11/2026

Morgan Stanley Smith Barney LLC

Signature:	David Galasso
Name/Title:	Authorized Signatory, Morgan Stanley Smith Barney LLC
Date:	02/11/2026

Exhibit Information

EXHIBIT NO. EXHIBITS ------------------ ------------------------------------ 99.1 Joint Filing Agreement 99.2 Item 7 Information * Attention. Intentional misstatements or omissions of fact constitute federal criminal violations (see 18 U.S.C. 1001).

FAQ

What stake does Morgan Stanley report in Highland Opportunities & Income Fund (HFRO)?

Morgan Stanley and Morgan Stanley Smith Barney LLC report beneficial ownership of 2,822,774 HFRO common shares, representing 5.1% of the fund’s outstanding class. This stake is disclosed in an amended Schedule 13G filing for regulatory ownership reporting purposes.

What type of securities does HFRO have owned by Morgan Stanley in this filing?

The filing states Morgan Stanley entities beneficially own Common Shares of Beneficial Interest of Highland Opportunities & Income Fund. These are the fund’s primary listed equity securities, identified by CUSIP 43010E404 in the ownership disclosure.

How much voting power does Morgan Stanley report over HFRO shares?

The reporting persons disclose shared voting power over 26 HFRO shares and no sole voting power. They also report shared dispositive power over 2,822,774 shares, indicating they can decide how those shares are disposed, subject to applicable arrangements.

Why was this Schedule 13G/A filed for HFRO?

The Schedule 13G/A reflects that Morgan Stanley and Morgan Stanley Smith Barney LLC beneficially own more than 5% of HFRO’s class, triggering reporting under SEC rules. The event date requiring the filing is listed as December 31, 2025.

Does Morgan Stanley seek control of Highland Opportunities & Income Fund (HFRO)?

The signatories certify the HFRO securities were acquired and are held in the ordinary course of business and not for the purpose of changing or influencing control of the issuer, consistent with passive ownership under Schedule 13G.

Who are the reporting entities in the HFRO Schedule 13G/A?

The filing lists Morgan Stanley and Morgan Stanley Smith Barney LLC as reporting persons. Both are organized in Delaware, with principal business offices at 1585 Broadway, New York, NY 10036, and are categorized as financial institutions under SEC rules.