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 34 years of experience Risk/Return In general, greater returns are associated with greater risks. Fund Statistics: Inception Date 12/12/94 Ticker Symbol CFGRX Cusip 200626406 Minimum Initial Investment $1,000 Commentary as of 12/31/11 Stocks came roaring back in the fourth quarter, capping off a volatile year in the equity markets. Improving labor market trends, lower odds of a double-dip recession in the U.S. and gradual progress in European sovereign debt problems provided a needed respite from recent headlines. The Fund posted a return of 11.05% in the quarter outperforming the10.61% return of the Russell 1000 Growth Index (Index). Energy-related companies were among the best performing during the quarter and the Fund’s modest overweight to this sector was beneficial. Occidental Petroleum (1.65%) and Exxon Mobil (5.31%) performed particularly well, climbing 31% and 17%. Among energy commodities, coal was the laggard in the quarter. Consequently, Arch Coal (0.59%) was flat for the period. Technology Services companies comprise the largest weight in the Index and while the Fund reduced its overweight in the quarter, it also remains the largest sector position in the Fund. This proved detrimental to performance as technology stocks underperformed the broader market. Software companies were the weakest among the group and stock selection compounded the sector underperformance with names like BMC Software (1.02%) (down -15%), Rovi Corp. (0.40%) (down -43%) and Oracle Corp. ( 2.04) (down -11%). One of the best contributors to the Fund’s performance during the quarter was its stock selection in the retail trade sector. The Fund was underweight this underperforming group, however its holdings managed to outperform the overall retail sector with the best being Lowes (1.76%), up 31%. Also of benefit was security selection in the process industries sector. The two best performers were purchased in the Fund mid-year and each gained over 30% in the quarter; these include Solutia (0.82%) and W.R. Grace (0.90%). Performance Report Total Fund Assets as of 12/31/2011 $93,685,200 Net Asset Value1 $25.36 Asset Allocation    Equities 99.4%    Cash 0.6% Average Market Capitalization $65.7 Billion

Holdings Top Ten Equity Holdings2 as of 12/31/2011 Apple Inc. 6.9% Exxon Mobil Corp. 5.3% International Business Machines Corp. 5.0% Google Inc. 3.7% Microsoft Corp. 2.9% United Technologies Corp. 2.7% Philip Morris International 2.7% Abbott Labs 2.4% Coca-Cola Co. 2.2% Oracle Corp. 2.0%       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 November, 2011* December, 2011* January, 2012* *Adobe Acrobat 6.0® or above required. Download now for free.

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