Value Fund

Overview

Objective

Seeks capital appreciation and, secondarily, current income.

Strategy

Invests in a diversified portfolio of equity securities of companies that represent excellent value relative to their current price. The Fund seeks a higher return than the market index over time as the stocks it purchases rise in price to more normal valuations.

The Management Team

The Fund is managed by the Equity Strategy Team, a group of senior-level investment professionals who average 29 years of experience.

Risk/Return

LOW - - - • - - - HIGH

In general, greater returns are associated with greater risks.

Fund Statistics

Inception Date 03/03/97
Ticker Symbol CFVLX
Cusip 200626828
Minimum Initial Investment $1,000

Commentary

Stocks posted a strong gain in the fourth quarter on the heels of a surprise Trump win in the November election. We believe that prospects of lower corporate taxes and less regulation gave investors hope of stronger earnings in the years to come. The Commerce Value Fund returned 7.15% outperforming the Russell 1000 Value returning 6.68%.

The Fund's stock selection was the main contributor to the Fund's outperformance for the period. The Fund's overall top performers for the period were Corecivic, Inc. (0.0%), Reynolds American Inc. (0.0%), and Cullen/Frost Bankers Inc. (2.04%) returning 73.04%, 15.08%, and 23.46%, respectively. Weak security selection in Consumer Durables offset some of the outperformance with Tupperware Brands Corporation (1.95%) down -18.47%.

The Fund's underweight position in Consumer Non-Durables and Health Technology added additional support to the Fund's outperformance. The Fund's zero allocation to the Transportation sector, which is 2.17% of the Index negatively impacted the Fund's performance The Transportation sector, which is 2.17% of the Index, was the second best performing sector returning 14.49%, but the Fund's zero allocation to this sector negatively impacted the Fund's performance. In addition, the Fund's underweight position to the Finance sector detracted from results for the quarter.

The Fund continues to maintain a portfolio of around 45 stocks that we feel are proven companies with a history of solid earnings and dividends to provide both capital appreciation and current income.

Total Fund Assets as of 12/31/2016 $305,803,483
Net Asset Value1 $31.65
Asset Allocation  
Equities 98.9%
Cash 1.1%
Weighted Average Market Capitalization $132.08 Billion

Holdings

Top Ten Equity Holdings2 as of 12/31/2016

Chevron Corporation 4.5%
AT&T Inc 4.1%
J P Morgan Chase & Company 3.64%
General Electric Company 3.5%
Wells Fargo & Company 3.5%
Exxon Mobil Corporation 3.4%
Pfizer Inc. 3.0%
Johnson & Johnson 2.9%
Merck & Company Inc. 2.8%
Verizon Communications 2.0%

Footnotes:
1. The Net Asset Value represents the assets of the fund (ex dividend) by the total number of shares.
2. The composition of the portfolio is subject to change in the future.
3. The Russell 1000 Growth Index is an unmanaged index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Index figures do not reflect any fees or expenses.

Portfolio Holdings

The Fund is subject to market risk so that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular industry sectors and/or general economic conditions.

Holdings and allocations shown are unaudited, and may not be representative of current or future investments. Holdings and allocations may not include the Fund's entire investment portfolio, which may change at any time. Fund holdings should not be relied on in making investment decisions and should not be construed as research or investment advice regarding particular securities.

Commerce Value Fund Holdings

January, 2017*
Febuary, 2017*
March, 2017*

A prospectus for the Commerce Funds containing more complete information may be obtained by calling 1-800-995-6365 or by downloading it from this website. Please consider a Fund's objectives, risks, and charges and expenses, and read the prospectus carefully before investing. The prospectus contains this and other information about the Fund.

The mutual funds referred to in this Web site are offered and sold only to persons residing in the United States and are offered by prospectus only. The prospectus contains more complete information about the funds, including charges and expenses, and should be read carefully before investing.