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Bond Fund

Overview

Objective Seeks total return through current income and, secondarily, capital appreciation.
Strategy Invests primarily in a broad range of government and investment-grade corporate bonds and other fixed-income securities.
Fund Manager The Fund is managed by the Fixed Income Team, a group of senior-level investment professionals who average 29 years of experience.
Risk/Return ico_risk_3
In general, greater returns are associated with greater risks.
 
 

Fund Statistics

Inception Date 12/12/94
Ticker Symbol CFBNX
Cusip 200626208
Minimum Initial Investment $1,000
 

Commentary

President Trump initiated a trade war to open the second quarter of 2025, announcing steep reciprocal tariffs affecting all US trading partners. Markets plunged and recovered as implementation deadlines were extended and deals with key trading partners were negotiated. The economy muddled through on a softening labor market and weaker growth prospects.

The Federal Reserve (Fed) left the federal funds target rate unchanged at 4.25% - 4.50% at each of its May and June meetings. Personal Consumption Expenditures (PCE) inflation continues to stabilize and drift down to the 2.2%-2.3% level, leaving the Fed room to maneuver as it waits to see the impact of finalized tariffs on employment and inflation. Treasury futures are projecting two further rate cuts by year-end.


Federal deficit concerns steepened the Treasury yield curve over the quarter. While the ten-year treasury yield was almost unchanged at 4.23% at quarter-end, the two-year treasury ended 17 basis points (bps) lower, and the thirty year Treasury ended 18 basis points higher.

For the second quarter, the Commerce Bond Fund’s return of 1.25% outperformed the Bloomberg US Aggregate Bond Index return of 1.21%. The Fund’s overweight to corporate bonds contributed to performance. A slight underweight to mortgage-backed securities detracted from performance.

A tumultuous second quarter saw the bond market decline immediately following the Liberation Day tariff announcements before recovering by quarter’s end on growing clarity of the tariffs. Definitive trade deals with key partners are expected imminently. Consensus is for a blended tariff rate of around 15% to subtract roughly 1% from US and global Gross Domestic Product (GDP) over the next four to six quarters. Economic forecasts project full year real GDP for 2025 to be 1.5% with a 35% probability of recession within a year.

 

 

 
 
Total Fund Assets as of 6/30/2025 $1,218,711,663
Net Asset Value1 $17.99
Effective Duration2 6.12 Yrs.
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 guarantee on U.S. government securities applies only to the underlying securities of the Fund if held to maturity and not to the value of the Fund's shares. Mortgage-backed securities are subject to prepayment risks, which may result in greater share price volatility. Asset-backed securities may be less liquid than other securities and therefore more difficult to value and liquidate, if necessary. Foreign investments may be more volatile than investment in U.S. securities and will be subject to the risks of currency fluctuations and political developments.

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 Bond Holdings

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 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. Please click the links for additional disclosures.