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Commerce Short Term Government Fund

  Overview
Objective
Seeks current income consistent with preservation of principal.

Strategy
Invests primarily in U.S. Government securities and government mortgage-backed securities.

Commentary
Portfolio Fund Holdings
Portfolio Composition
Fund Manager - Scott M. Colbert, CFA

  • Joined Commerce in 1993
  • Fund Manager since Fund inception
  • 22 years of experience

    Risk/Return

    Risk/Return

    In general, greater returns are associated with greater risks.


  • Fund Statistics:
    Inception Date 12/12/94
    Ticker Symbol CFSTX
    Cusip 200626109
    Minimum Initial Investment $1,000


    Commentary as of 3/31/2009

    Economic problems persisted throughout the quarter as the Federal Reserve (the “Fed”) and treasury scrambled to stabilize the debt markets.  A number of programs to stimulate the credit markets were introduced by the U.S. government to get the economy back on track.   While unemployment numbers worsened, new and existing home sales started to show some promise.   Efforts to spark a housing-market recovery pushed mortgage rates to record lows and helped induce a wave of refinancing.  By the end of March, the tone of the investment markets began to slightly improve.

    Interest rates moved higher for the first half of the first quarter and then trended sideways for the second half, ending up 10-20 basis points at the short end of the yield curve.  Upward pressure on treasury yields was largely due to concerns that there will be insufficient demand to soak up the coming surge in government bond issuance.  The Fed Funds rate was left unchanged at 0.00% - 0.25% after both of its meetings in the quarter.  They commented that inflation is expected to remain subdued.

    The Short-Term Government Fund’s return for the first quarter exceeded the Citigroup 1-5 Year Treasury/Government Sponsored Index.  An underweight in treasuries relative to the benchmark contributed positively to performance.  Also, the Fund’s strategic overweight of mortgage-backed securities and agencies helped the Fund outperform.  Only the portfolio’s maturity structure hindered performance.

    The government’s assortment of policy initiatives are gradually helping the economy regains its footing.  We believe low mortgage rates should continue to benefit the housing market and contribute to the recovery.

     


    Performance Report


    Total Fund Assets as of 3/31/2009
    $78,859,636.52
    Net Asset Value1 $17.89
       Effective Duration 2 2.23 years

    Portfolio Composition as of 3/31/093

    By Security Type

    Pie Chart

    By Credit Rating

    Pie Chart

    Footnotes:
    1. The Net Asset Value represents the assets of the fund (ex dividend) by the total number of shares.
    2. Duration is the method determining a bond's price sensitivity, given changes in interest rates.
    3. The composition of the portfolio is subject to change in the future.

    Portfolio Holdings

    Investments in fixed income securities are subject to the risks associated with debt securities including credit and interest rate risk. When interest rates rise, the prices of bonds and therefore the value of fixed income mutual fund shares can decrease and an investor can lose principal value. The guarantee on U.S. government securities applies only to the underlying securities of the Fund if held to maturity and not to the value of the Fund's shares. Mortgage-backed securities are subject to prepayment risks. These risks may result in greater share price volatility.

    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 SHORT-TERM GOVERNMENT FUND HOLDINGS

     

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