Commerce 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. Commentary Portfolio Fund Holdings Top Ten Holdings Sector Diversification Management Team The Fund is managed by the Equity Strategy Team, a group of senior-level investment professionals who average 22 years of experience. Risk/Return In general, greater returns are associated with greater risks. Fund Statistics: Institutional Shares Inception Date 03/03/97 Ticker Symbol CFVLX Cusip 200626828 Minimum Initial Investment $1,000 Commentary for Institutional Shares as of 6/30/2008 The second quarter market performance was a story of three very different months, with April posting solid returns, moving sideways in May, before giving way to a strong sell-off in the month of June.  The Value Fund lost 5.87%, slightly underperforming the Russell 1000 Value Index which declined 5.31% for the second quarter. The Fund’s overweight positions in electronic technology and technology services added to Fund returns as these sectors outperformed the benchmark.  An underweight position in utilities detracted from overall Fund returns as this was among the strongest sectors for the second quarter.  An overweight position in consumer non-durables was also a drag on the Fund’s returns. The financial sector spent yet another quarter as the market’s worst performing sector.   The Fund’s underweight in financials combined with good security selection made this sector the biggest positive contributor for the second consecutive quarter.  The Fund found strength in financial names such as Progressive Corp. (0.22%), Safeco Corp. (0.35%) and AON Corp. (1.18%). Security selection in the energy minerals sector detracted from Fund returns with the largest holding in the Fund, Exxon Mobil Corp. (7.83%), underperforming the group.  Poor stock selection in consumer non-durables with weakness from Coca-Cola Enterprises Inc. (0.28%), Pepsi Bottling Group Inc. (0.56%), and Reynolds American Inc. (1.25%), offset the strength from the financials sector. Performance Report Institutional Shares Total Fund Assets as of 6/30/2008 $95,939,579.72 Net Asset Value, Institutional Shares1 $20.98 Asset Allocation    Equities 99.2%    Cash 0.8% Average Market Capitalization $104.2 Billion

Holdings Top Equity Ten Holdings5 as of 6/30/2008 Exxon Mobil Corp. 7.8% General Electric Co. 4.2% Chevron Corp. 4.0% AT&T Inc. 3.2% Proctor & Gamble Co. 3.1% Pfizer Inc. 2.7% Johnson & Johnson 2.4% Verizon Communications 2.1% CA Inc. 1.9% ConocoPhillips 1.8%   Sector Diversification as of 6/30/2008   Fund Index*     Fund Index* Finance 22.52% 26.52%   Technology Services 2.74% 0.95% Energy Minerals 17.46% 15.74%   Non-Energy Minerals 2.45% 1.72% Health Technology 9.94% 8.64%   Other 2.16% 0.00% Producer Manufacturing 8.19% 7.00%   Retail Trade 1.62% 3.72% Consumer Non-Durables 7.60% 6.24%   Industrial Services 1.36% 1.34% Communications 6.45% 5.77%   Consumer Durables 0.60% 1.45% Electronic Technology 5.69% 3.31%   Health Services 0.47% 1.49% Utilities 3.87% 6.49%   Commercial Services 0.29% 0.61% Process Industries 3.81% 3.20%   Distribution Services 0.00% 0.50% Consumer Services 2.78% 4.25%   Transportation 0.00% 1.06%         Total 100%   *Russell 1000 Value Index 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 Value Index is an unmanaged index that measures the performance of the 1,000 largest U.S. companies based on total market capitalization, with lower price-to-book ratios and lower 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 June, 2008* July, 2008* August, 2008*   *Adobe Acrobat 6.0® or above required. Download now for free.

A prospectus for the Commerce Funds containing more complete information may be obtained by calling 1-800-995-6365 or bydownloading 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.

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