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

The Russell MidCap Growth index reached new all-time highs late in the second quarter of 2019. Despite a global economy that was losing steam, stocks were able to rally as it became more likely that the Federal Reserve will begin to cut interest rates in the back half of the year. We feel this calmed fears that tight monetary conditions would choke out growth. The Commerce MidCap Growth Fund fnished the quarter up 8.46%, outperforming the Russell MidCap Growth Index return of 5.40%.

Stock selection boosted the Fund’s relative performance. The strongest stocks were HEICO Corporation (1.24%), Cerner Corporation (1.18%), and Manhattan Associates (1.22%), up 41%, 28%, and 26%, respectively. The Fund’s weakest stocks for the period were Palo Alto Networks (1.20%), Rollins, Inc. (1.10%), and Advance Auto Parts, Inc. (1.18%) down -16%, -14%, and -10%, respectively.

The Fund’s sector allocations also beneftted relative performance. The Fund’s 5% overweight to Commercial Services sector (up 10.7%) helped performance. However, the Fund’s 2% underweight to Consumer Durables sector (up 12%), detracted from performance.

During the quarter the Fund increased its position in the Electronic Technology sector from 11.0% to 13.8%, with the purchase of Jabil Inc. (1.40%) and Teradata Corporation (1.17%), reducing the Fund’s underweight to the sector. The Fund decreased its position to the Retail Trade sector from 5.0% to 2.4% through the sale of Carter’s, Inc. (0.00%) and Ross Stores, Inc. (0.00%) increasing the underweight to the sector.

Total Fund Assets as of 9/30/2019 $218,021,097
Net Asset Value1 $43.60
Asset Allocation  
Equities 100.0%
Cash 0.0%
Weighted Average Market Capitalization 14.6 Billion

Holdings

Top Ten Equity Holdings2 as of 9/30/2019

iShares Russell Mid-Cap Growth 2.7%
CDW Corp 1.3%
Advanced Auto Parts, Inc. 1.3%
Pool Corporation 1.3%
ANSYS, Inc. 1.3%
Church & Dwight Co. Inc. 1.3%
Gartner, Inc. 1.3%
Lamar Advertising Company 1.3%
Wendy's Company 1.3%
Amphenol Corporation 1.3%

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 Holdings

September 2019*
October 2019*
November 2019*

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.