Commerce Funds - Asset Allocation Fund

COMMERCE ASSET ALLOCATION FUND
As of 9/30/05

Total Fund Assets	$17,267,554
Net Asset Value, Institutional Shares¹	$21.76
Net Asset Value, Service Shares¹	$21.75
Fund Allocation²	% of Fund
Commerce Growth Fund	19.6%
Commerce Value Fund	24.2%
Commerce MidCap Growth Fund	5.1%
Commerce International Equity Fund	11.6%
Commerce Bond Fund	29.8%
T. Rowe Price Mid-Cap Value Fund	6.2%
iShares MSCI Emerging Markets Index Fund	3.4%

Quarterly Fund Commentary

For the quarter ending September 30, 2005, the Commerce Asset Allocation Fund provided a total return of 3.13% which compares favorably with the blended (S&P500, EAFE and Lehman) static benchmark return of 2.74%. This outperformance was directly related to the fund’s 2005 year-to-date overweighting of equities relative to the benchmark and the fund’s use of the Barclay’s Emerging Markets I Shares as a component of foreign equity. During the quarter, stocks outperformed bonds significantly and foreign stocks outperformed domestic issues. Therefore, he extra weighting in stocks helped on both counts.

Among the component segments, emerging market stocks were up 18.5%, developed international stocks were up 8.9%, mid cap growth and value stocks were up 5.6% and 3.1%, respectively and large cap value and growth issues were up 4.0% and 2.7%, respectively. The bond component declined 0.9% in a rising interest rate environment.

Footnotes:

2. The composition of the portfolio is subject to change in the future.

Not FDIC-Insured. May Lose Value. No Bank Guarantee.