Commerce Growth Fund

Overview Objective Seeks capital appreciation and, secondarily, current income. Strategy Primarily focuses on the stocks of companies that have shown and are expected to show above-average growth in earnings. Commentary Portfolio Fund Holdings Top Ten Holdings Sector Diversification Fund Manager - Joseph C. Williams III, CFA Joined Commerce in 1975 Fund Manager since Fund inception 31 years of experience Risk/Return In general, greater returns are associated with greater risks. Fund Statistics: Institutional Shares Inception Date 12/12/94 Ticker Symbol CFGRX Cusip 200626406 Minimum Initial Investment $1,000 Commentary for Institutional Shares as of 6/30/2008 Stock prices moved higher for the first half of the quarter, as the market recovered from the Bear Stearns financial collapse. As May progressed, oil prices continued to move higher, further cracks in the financial system began to appear, and with consumer and business confidence plunging, stocks prices turned down. The major averages declined reaching new lows by the end of the quarter. Energy and industrial stocks (mainly oil service) were the one bright spot in the quarter, surging 23%.  The Fund’s performance was hurt because Exxon Mobil Corp. (4.17%), which is the second largest holding, only increased 1%. Exxon Mobil Corp. accounted for over half of the underperformance in the quarter. We did increase our positions in companies exposed to energy and are now overweight the index. Usually when the stock market declines consumer staple stocks hold up well, but that was not entirely the case over the last few months. Pepsi Bottling Group Inc. (1.44%), Procter & Gamble Co. (1.65%), and Pepsico Inc. (0.55%) declined 20%, 14%, and 12%, respectively.  The performance of these positions hurt the return of the Fund during the quarter.  The Fund performance was helped with our underweighting in financials, consumer non-durables and retail trade sectors. Stock selection was strong in technology with Google Inc. (2.00%) and Apple Computer Inc. (1.26%) gaining 13% and 12%, respectively. Performance Report Institutional Shares Total Fund Assets as of 6/30/2008 $155,405,920.41 Net Asset Value, Institutional Shares1 $24.20 Asset Allocation    Equities 99.6%    Cash 0.4% Average Market Capitalization $84.9 Billion

Holdings Top Ten Equity Holdings2 as of 6/30/2008 Microsoft Corp. 4.3% Exxon Mobil Corp. 4.2% Oracle Corp. 3.1% Cisco Systems Inc. 3.0% Johnson & Johnson 2.8% Monsanto Co. 2.6% Schlumberger Ltd 2.5% Gilead Sciences Inc. 2.5% International Business Machines 2.2% Occidental Petroleum Corp. 2.2%   Sector Diversification as of 6/30/2008   Fund Index*     Fund Index* Electronic Technology 18.61% 17.12%   Process Industries 4.14% 3.14% Technology Services 15.98% 12.94%   Commercial Services 2.59% 1.05% Health Technology 13.45% 9.72%   Distribution Services 1.66% 0.98% Industrial Services 7.97% 7.28%   Other 1.25% 0.00% Producer Manufacturing 7.54% 6.96%   Consumer Services 1.14% 5.00% Energy Minerals 6.33% 5.84%   Consumer Durables 0.65% 0.66% Consumer Non-Durables 5.11% 8.73%   Communications 0.00% 0.72% Health Services 4.60% 1.83%   Non-Energy Minerals 0.00% 1.61% Finance 4.59% 5.39%   Utilities 0.00% 2.33% Retail Trade 4.39% 6.03%   Transportation 0.00% 2.67%         Total 100%   *Russell 1000 Growth 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 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 invests in mid-capitalization securities. The securities of mid-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. 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 GROWTH FUND HOLDINGS June, 2008* July, 2008* August, 2008*   *Adobe Acrobat 6.0® or above required. Download now for free.

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