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 25 years of experience. Risk/Return 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 as of 12/31/2011 The fourth quarter produced strong results for equity markets and moved most large cap domestic equity index returns back into positive territory for the year. The Commerce Value Fund returned 12.86% for the fourth quarter slightly underperforming the Russell 1000 Value Index (Index) return of 13.11% by 25 basis points. The Fund’s underweight in financials and overweight in process industries contributed positively to the Fund’s returns while an overweight position in consumer non-durables offset much of this positive impact during the quarter. Security selection in financials continued to be a strong contributor to the Fund’s returns with strength in names such as Bank of Hawaii (1.92%), Cullen Frost Bankers (1.84%), AFLAC (1.74%) and BlackRock (1.82%). Offsetting this strength was security selection in industrial services and consumer services with weak performance from Waste Management (1.86%) and Darden Restaurants (1.94%) respectively. The Fund continues to focus on a portfolio of about 50 stocks that are solid companies with a history of steady and increasing dividends to provide both capital appreciation and current income. Performance Report Total Fund Assets as of 12/31/2011 $85,226,530 Net Asset Value1 $21.73 Asset Allocation    Equities 94.8%    Cash 5.2% Average Market Capitalization $46.07 Billion

Holdings Top Equity Ten Holdings5 as of 12/31/2011 Chevron Corp. 4.6% Conoco Phillips 4.1% Pfizer Inc 3.0% Merck & Company Inc 2.9% Verizon Communications 2.9% A T & T Inc 2.8% Home Depot Inc 2.0% HCP Inc 2.0% Darden Restaurants Inc 1.9% Bank of Hawaii Corporation 1.9%   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 November, 2011* December, 2011* January, 2012* *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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