MidCap Growth Fund

Overview

Objective

Seeks capital appreciation.

Strategy

Invests in a diversified portfolio of equity securities of medium-sized companies that show the potential for above-average growth in earnings.

The Management Team

The Fund is managed by the Equity Strategy Team, a group of senior-level investment professionals who average 31 years of experience.

Risk/Return

LOW - - - - - • - HIGH

In general, greater returns are associated with greater risks.

Fund Statistics

Inception Date 12/12/94
Ticker Symbol CFAGX
Cusip 200626505
Minimum Initial Investment $1,000

Commentary

U.S. equity markets continued the post-election rally through the 1st quarter as prospects of lower corporate taxes, less regulation and a stronger economy gave investors hope that earnings growth will begin to accelerate over the coming years. However, investors rotated out of the value stocks and into growth stocks in the Technology and Health Care sectors. The Commerce Mid Cap Growth Fund rose 7.00%, performing in line with the Russell Mid Cap Growth Index return of 6.89%.

Stock selection had little impact on the Fund’s relative performance. The Fund’s best performers for the period were Panera Bread Company (1.31%), Cadence Design Systems (1.18%), and MSCI Inc (1.16%) up 28%, 25%, and 24%, respectively. The weakest stocks were Dun & Bradstreet Corporation (0.00%), T. Rowe Price Group (1.18%), and Westinghouse Air Brake Technologies (0.00%), down 13%, 9% and 6%, respectively.

Sector allocation was the main contributor to the Fund’s performance. The Fund’s 2% underweight Retail Trade sector (down 5%) boosted performance. However, the Fund’s 4% underweight to Health Technology sector (up 14%) detracted from performance.

During the quarter the Fund increased its position in the Technology Services sector from 11.8% to 13.2%, with the purchase of WEX Inc (1.19%). The Fund reduced its position in the Electronic Technology sector from 7.4% to 6.0% through the sale of TransDigm Group Incorporated (0.00%).

Total Fund Assets as of 03/31/2017 $126,131,390
Net Asset Value1 $36.69
Asset Allocation  
Equities 99.0%
Cash 1.0%
Weighted Average Market Capitalization $12,000

Holdings

Top Ten Equity Holdings2 as of 03/31/2017

iShares Russell MidCap Growth ETF 2.5%
Panera Bread Company 1.3%
Ventas, Inc 1.3%
Marriott International 1.3%
Coach, Inc 1.3%
Carter's Inc. 1.3%
Gaming and Leisure Properties 1.3%
Red Hat, Inc. 1.3%
Motorola Solutions 1.3%
IDEX Corporation 1.2%

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 MidCap Growth Fund Holdings

March, 2017*
April, 2017*
May, 2017*

A prospectus for the Commerce Funds containing more complete information may be obtained by calling 1-800-995-6365 or by downloading it from this website. Please consider a Fund's objectives, risks, and charges and expenses, and read the prospectus carefully before investing. The prospectus contains this and other information about the Fund.

The mutual funds referred to in this Web site are offered and sold only to persons residing in the United States and are offered by prospectus only. The prospectus contains more complete information about the funds, including charges and expenses, and should be read carefully before investing.