Commerce National Tax-Free Intermediate Bond Fund

Overview Objective Seeks current income exempt from federal income tax consistent with the preservation of capital. Strategy Focuses on a broad range of investment-grade municipal securities, typically issued by or on behalf of the states, territories and possessions of the United States, the District of Columbia, and their respective authorities, agencies, instrumentalities and 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 CFNLX Cusip 200626703 Minimum Initial Investment $1,000 Commentary for Institutional Shares as of 6/30/2008 After an incredibly volatile start to the year, the municipal bond market settled in to a much tighter trading range. Bond investors where whipsawed during the first quarter as yields jumped almost 1.00% in the month of February, then declined rapidly in March.  High quality, intermediate bond yields ended the 2nd quarter much where they began.  The biggest change, or in this case decline in value, occurred in lower quality issuers, particularly those carrying an insurance wrap from one of the troubled bond insurers.   The two largest, AMBAC and MBIA, had their bond insurance subsidiaries downgraded by both major rating agencies.  This has left muni investors grappling with placing a trading value on the underlying credits.  It’s important to keep in mind that to start the year, over half the municipal bond market was triple-A rated solely due to the bond insurers’ guarantee.  Now investors are forced to know and understand the underlying credit in more detail.  We feel this presents tremendous trading opportunities for institutional investors, like ourselves, that have the capability and resources to make such distinctions amongst the literally thousands of municipal issuers that have debt outstanding. For the second quarter, the Fund outperformed its benchmark, the Lehman 3-15 Year Blend Index, and outperformed its peers as measured by the Lipper 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 the negativity.  As additional yield offered on lower-rated credits increases, we will look for opportunities to increase our exposure in that space.    Performance Report Institutional Shares Total Fund Assets as of 6/30/2008 $144,358,277.60 Net Asset Value, Institutional Shares1 $18.59    Effective Duration 2 5.82 years    Average Coupon 4.76%

Portfolio Composition as of 6/30/083 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, and investment income 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's investments may subject shareholders to the federal alternative minimum tax and 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 NATIONAL TAX-FREE INTERMEDIATE BOND FUND HOLDINGS June, 2008* July, 2008* August, 2008*   *Adobe Acrobat 6.0® or above required. Download now for free.

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