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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

Despite a shutdown of the federal government that lasted 43 days into the start of the quarter, annualized Gross Domestic Product (GDP) is projected to be 2.70% for the fourth quarter and follows a strong 4.30% registered in the third quarter. Concerns about trade policy continued to fade into year end, though imminent Supreme Court rulings on global tariffs may bring economic volatility at the start of 2026.

The Federal Reserve (Fed) cut the federal funds target rate twice over the course of the quarter to the current 3.50%-3.75% range. Slowing employment and price stability were cited as reasons for the accommodation, though the shutdown muddied economic data. Treasury futures forecast two additional cuts over the course of 2026.

U.S. Treasury yields reacted to the Fed’s actions by pivoting around the 10 Year Treasury. For the fourth quarter yields moved lower for 1 to 5 year maturities and rose slightly for maturities longer than 10 years. The yield on the 10 Year Treasury closed the year at 4.17%, 40 basis points lower than the start of 2025.

The Commerce Bond Fund’s return of 0.95% underperformed the Bloomberg US Aggregate Bond Index return of 1.10% for the fourth quarter. The Fund’s underweight to agency mortgages detracted from performance. The Fund’s overweight to corporate credit contributed to performance.

Consensus forecasts project 2026 GDP growth between 2.0% and 2.5%, likely a slowdown from 2025 as unemployment stabilizes. Regardless, mid-term election issues are expected to drive expansive fiscal policy. Business investment into AI infrastructure along with a steady consumer spending argue for continued steady economic expansion.

 

 
 
Total Fund Assets as of 12/31/2025 $1,243,878,740
Net Asset Value1 $18.21
Effective Duration2 5.98 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.