Interim Management Statement

RNS Number : 8356Q

Advance Developing Markets Fund Ltd

04 September 2014

Advance Developing Markets Fund Limited ("the Company")

This interim management statement covers the period from 1 May 2014 to 31 August 2014¹ and up to the date of publication of this statement. It is the second interim management statement issued by the Company in its financial year to 31 October 2014, as required by the UK Listing Authority's Disclosure and Transparency Rule 4.3.

Investment objective and summary of investment policy

The Company's investment objective is to achieve consistent returns for Shareholders in excess of the MSCI Emerging Markets Net Total Return Index in Sterling terms.

Advance Emerging Capital Limited (the "Investment Manager") invests in a portfolio of funds and products which give diversified exposure to developing and emerging market economies. 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 Investment Manager has discretion to enter into hedging mechanisms where it believes that this would protect the performance of the Company's investment portfolio in a cost effective manner.

Highlights

During the period from 1 May 2014 to 31 August 2014:

* Net Asset Value ("NAV") per ordinary share ("Share") increased by 11.8%

* Share price increased by 11.7%

* MSCI Emerging Markets Net Total Return Index in Sterling terms increased by 12.6%

* NAV per Share was 509.52p as at 29 August 2014

* Share price was 452.0p (mid-market) as at 29 August 2014

* Net assets were £264.6 million as at 29 August 2014

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

During the period the Company conducted a Tender Offer and 5,769,467 ordinary shares were repurchased and cancelled, equating to 10 percent of the Company's shares in issue as at 7 May 2014 at a price of 473.6622p per share.

From 1 July 2014, Chief Investment Officer responsibilities at Advance Emerging Capital passed to Bernard Moody and Andrew Lister. Bernard and Andrew are jointly responsible for the management of Advance Emerging Capital's products including Advance Developing Markets Fund. They are long standing and senior members of the Advance Emerging Capital Investment Team, with 28 years'
combined experience of investing in emerging and frontier markets through both
open and closed end funds.

On 4 August 2014 the Company announced that Advance Emerging Capital Limited had received its authorisation as an Alternative Investment Fund Manager from the UK's Financial Conduct Authority. Northern Trust (Guernsey) Limited has been appointed to provide depositary services to the Company with effect from 1 August 2014.

Top 10 Holdings as at 29 August 2014	% of NAV
Korea Fund Inc	8.0%
Neuberger Berman - China Equity Fund	6.5%
Coronation Top 20 Fund	5.7%
Edinburgh Dragon Trust	5.1%
Schroder Asia Pacific Fund	5.0%
China Fund Inc	4.7%
JPMorgan Russian Securities	4.3%
India Fund Inc	4.0%
GBM Mexico Fund	4.0%
Advance Brazil Leblon Equities Fund	3.8%
Total for top 10 holdings	51.0%