Interim Management Statement

RNS Number : 9825S

Advance Developing Markets Fund Ltd

20 September 2010

Advance Developing Markets Fund Limited ("the Company")

For the period from 1 May 2010 to 31 August 2010

This interim statement covers the period from 1 May 2010 to 31 August 2010. It is the second interim management statement issued by the Company in its financial year to 31 October 2010, as required by the UK Listing Authority's Disclosure and Transparency Rule 4.3.

Investment objective and policy

The Company's objective is to achieve consistent returns for shareholders in excess of the S&P/IFCI Emerging Markets Composite Index in Sterling terms (the "Benchmark"). Advance Emerging Capital Limited (the "Manager") invests in a portfolio of funds and products which give diversified exposure to global emerging markets. The Company's geographic asset allocation is derived from the Investment Manager's analysis of the prospects for regions and countries and of the underlying opportunities for investment. Individual investments are selected for their potential to outperform as a result of one or more of the following criteria: the performance of the region, market or asset class in which they invest; the skill of the underlying fund manager; and, in the case of closed end funds, through the narrowing of discounts at which their shares trade to net asset value. The Manager may employ hedging mechanisms where it believes that this would protect the performance of the Company's investment portfolio in a cost effective manner.

Benchmark

S&P/IFCI Emerging Markets Composite Index (£ Price Return)

Highlights

During the period from 1 May 2010 to 31 August 2010:

* Undiluted Net Asset Value per share fell by 2.6%

* Share price fell by 0.9%

* S&P/IFC Composite Index (sterling adjusted) fell by 5.2%

* Undiluted NAV per share 505.2p as at 31 August 2010

* Diluted NAV per share 471.8p as at 31 August 2010

* Share price 422.0p as at 31 August 2010

* Net assets £333.7m as at 31 August 2010

Gearing

Gearing is not used as a tool to enhance performance but short term borrowing is permitted to assist in the management of liquidity.

Material transactions and events

The Board of Directors is not aware of any other significant events or transactions that have occurred between 1 May 2010 and the date of this interim management statement that would have a material impact on the financial position or performance of the Company.

Manager's Comment

Global emerging markets fell by close to 10% in May and spent most of the remainder of the period slowly recouping those losses to finish it down 5.2%. The Company fared somewhat better than the benchmark index recording an NAV return of -2.6%.

The outperformance of Company's NAV over the benchmark during the period came largely from manager selection, with selected funds in Brazil, India, Russia and Thailand performing particularly well. Asset allocation was neutral and discount movements made a small positive contribution to relative performance.

While emerging markets have been largely range-bound thus far in 2010, we are encouraged that economic and corporate fundamentals within emerging markets remain strong and valuations are not excessive.

Top 10 Holdings at 31 August 2010	% of NAV
Atlantis China Fund	7.6%
BlackRock Latin American Investment Trust	5.3%
JP Morgan Russian Investment Trust	5.0%
Taiwan Fund Inc	4.8%
Henderson TR Pacific Investment Trust	4.8%
Aberdeen Latin America Equity	4.3%
Baring Emerging Europe Investment Trust	4.0%
Tarpon All Equities Fund	3.9%
Advance Brazil Leblon Equity Fund	3.5%
Edinburgh Dragon Trust	3.4%