City Lon Inv Regulatory News (CLIG)

City of London Investment Group PLC

06 January 2015

CITY OF LONDON INVESTMENT GROUP PLC

("City of London", "the Group" or "the Company")

FUNDS UNDER MANAGEMENT AS AT 31 December 2014, TRADING UPDATE

City of London (LSE: CLIG) announces that total funds under management (FuM) at the Group's half year end on 31 December 2014 were US$4.0 billion (£2.6 billion). This compares with US$4.0 billion (£2.5 billion) at 30 September 2014, and US$3.9 billion (£2.3 billion) at the Company's year-end on 30 June 2014.

FuM remained unchanged over the quarter, while the MSCI Emerging Markets TR Index (NDUEEGF) fell 5% over the same period.

As of the end of December the monthly "run-rate" for operating profit, before profit-share of c.30%, is approximately £1.0 million per month based upon current FuM. The Group estimates the unaudited profit before taxation for the six months ended 31 December 2014 to be approximately £4.3 million, which compares to £3.3 million for the equivalent period to 30 November 2013.

Note: the financial year end changed from May to June in 2014.

It should also be noted that our diversification products are now gaining traction and therefore we have set an increased target of $500m for the next financial year (2015/2016).

The Company is currently in a close period which will end with the publication of results for the six months ended 31 December 2014 on 11 February 2015.

Forward Guidance

Please see the attached graph which is based on the following assumptions and includes the estimated quarterly cost of a maintained dividend:http://www.rns-pdf.londonstockexchange.com/rns/3460B_-2015-1-5.pdf

FuM of US$4.0 billion at 31 December 2014 compares with US$4.5 billion as originally implied at the time of the June 2014 accounts. At that time the assumptions included market growth at 10% per annum whereas the MSCI Emerging Markets TR Index has fallen by 8% from end June to end December. Furthermore, approximately $120m of assets expected by 31 December 2014 will now fall into the latter half of the financial year. The targets for the next six months have been adjusted accordingly.

Assumptions:

· Starting point Current FuM (December 2014)

· Target new money for the remainder of this F/Y, straight-lined to June 2015

- emerging market strategies $350m

- non-emerging market strategies $145m

· Target new money for F/Y 2015/2016, straight-lined to June 2016

- emerging market strategies $500m

- non-emerging market strategies $500m

· Operating margin adjusted monthly for change in product mix and commission run-off

· Market growth: 5% pa

· Decrease in overheads for 2014/2015: -2% (compared 2013/14 annualised)

· Increase in overheads for 2015/2016: +5% (compared 2013/14 annualised)

· Corporation tax based on an estimated average rate of 27%

· Exchange rate assumed to be £1/$1.57 for entire period

· Number of CLIG Shares in issue (26.9m) less those held by the ESOP Trust (2.2m) as at 31 December 2014

This release includes forward-looking statements, which may differ from actual results. Any forward-looking statements are based on certain factors and assumptions, which may prove incorrect, and are subject to risks, uncertainties and assumptions relating to future events, the Group's operations, results of operations, growth strategy and liquidity.

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