Commerce Missouri Tax-Free Intermediate Bond Fund

Overview Objective Seeks current income exempt from federal and, to the extent possible, from Missouri income taxes, as is consistent with the preservation of capital. Strategy Focuses primarily on investing in municipal obligations issued by the State of Missouri and its political subdivisions. Commentary Portfolio Fund Holdings Portfolio Composition Fund Manager - Brian P. Musielak, CFA Joined Commerce in 1995 Fund Manager since January, 1999 13 years of experience Risk/Return In general, greater returns are associated with greater risks. Fund Statistics: Institutional Shares Inception Date 02/21/95 Ticker Symbol CFMOX Cusip 200626802 Minimum Initial Investment $1,000 Commentary for Institutional Shares as of 9/30/2008 As we continue our highly volatile year in the markets, the third quarter brought us the worst session of liquidity in more than 25 years for the municipal bond market (“munis”).  Overall performance in munis was the worst in over 20 years.  Restored confidence in the entire scope of the financial markets is what will ultimately be needed to return to some stability, and the passage and implementation of the Financial Markets Rescue Bill should be the first step in that process.    For the quarter, munis saw a drastic decrease in value, or increase in yield, in the intermediate term.  Yields increased anywhere from 30 to 70 basis points in the 10-15 year range.  Additionally, the market is still coming to terms with understanding underlying credit ratings as the bond insurers continue to struggle, and many bonds with insurance are trading at lower levels than if they did not have insurance at all.  The short term part of the curve saw a dramatic increase in supply, especially as it pertains to Variable Rate Demand Notes.  It is estimated that dealers are now holding about $54 billion in Variable Rate Demand Notes as holders began to exercise the put option on this in mass.  This large increase in supply has helped to drive the short term of the curve up in yield as well.   For the third quarter, the Fund underperformed its benchmark, the Lehman 3-15 Year Blend Index, but outperformed its peers as measured by the Lipper Other States Intermediate Municipal Debt Funds Category 2nd Quartile Total Return Ranking.   Our overweight to higher yielding revenue bonds remained a drag on performance, particularly against our benchmark, while a higher concentration in bonds in the best performing maturity range, 10-15 years, helped to offset.  As additional yield offered on lower-rated credits increases, we will look for opportunities to increase our exposure in that space.  It is also notable that Missouri has seen a drastic decrease in the supply of paper, especially relative to other states.    Performance Report Institutional Shares Total Fund Assets as of 9/30/2008 $166,781,234.10 Net Asset Value, Institutional Shares1 $18.37    Effective Duration 2 5.98 years    Average Coupon 5.05%

Portfolio Composition as of 9/30/083 By Security Type By Credit Rating 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 of determining a bond's price sensitivity, given changes in interest rates. 3. The composition of the portfolio is subject to change in the future. 4. The Fund's investments may subject shareholders to federal alternative minimum tax. The investment income from this Fund may be subject to state income taxes.

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 Fund is non-diversified. Due to the small number of bonds generally held in the portfolio, the Fund may be subject to greater risks than a more diversified fund. A change in the value of any single holding may affect the overall value more than it would affect a diversified fund that holds more investments. In addition, the Fund's investments may subject shareholders to federal alternative minimum tax. The investment income from this Fund may be subject to state income taxes. 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 MISSOURI TAX-FREE INTERMEDIATE BOND FUND HOLDINGS August, 2008* September, 2008* October, 2008*   *Adobe Acrobat 6.0® or above required. Download now for free.

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