MidCap Value

Overview

Objective

Seeks capital appreciation and, secondarily, current income.

Strategy

Invests in a diversified portfolio of equity securities of medium-sized companies that represent excellent value relative to their current price. The Fund seeks a higher return than the market index over time as the stocks it purchases rise in price to more normal valuations.

The Management Team

The Fund is managed by the Equity Strategy Team, a group of senior-level investment professionals who average 37 years of experience.

Risk/Return

LOW - - - - - • - HIGH

In general, greater returns are associated with greater risks.

Fund Statistics

Inception Date 11/13/23
Ticker Symbol CFMVX
Cusip 200626711
Minimum Initial Investment $1,000

Commentary

After a weak beginning to the quarter, equity prices found their footing in November supported with continued positive economic news. The rally was provided a further lift in December with unanticipated comments from the Federal Reserve regarding a potential pivot from increasing to decreasing short interest rates in 2024. As we closed the quarter, most equity indices were posting 52-week highs. The Commerce MidCap Value Fund was first invested on November 13, 2023, and therefore does not have return data for the full quarter. The Commerce MidCap Value’s return from the inception date to the end of the quarter was 13.46% which was in line with the Russell MidCap Value Index return of 13.56%.

Stock selection detracted from the Fund’s performance. The Fund’s strongest contributors were MKS Instruments, Inc. (1.41%), Invesco Ltd. (1.37%), and Blackstone Inc. (1.33%), returning 48.20%, 37.65%, and 33.96%, respectively. The Fund’s top detractors were Texas Pacific Land Corporation (1.18%), Omega Healthcare Investors, Inc. (1.16%), and Archer-Daniels-Midland Company (1.13%), returning -5.17%, -2.42%, and -0.52%, respectively.

The Fund’s sector allocation positively contributed to performance for the quarter. The Fund’s 0.58% underweight in the Energy sector, which returned 1.75%, added to performance as it was a weaker sector. The Index had an 5.38% weight in the Energy sector. However, the Fund’s 0.63% underweight position in the Health Care sector hurt performance as it was a stronger sector, gaining 15.89% for the quarter. The Index had an 6.75% weight in the Health Care sector.

Total Fund Assets as of 12/31/2023 $254,160,868
Net Asset Value1 $29.69
Asset Allocation  
Equities 99.4%
Cash 0.6%
Weighted Average Market Capitalization 24.8 Billion

Holdings

Top Ten Equity Holdings2 as of 12/31/2023

iShares Russell MidCap Value 2.3%
MKS Instruments Inc 1.4%
Invesco Ltd 1.4%
Blackstone Inc 1.3%
Weyerhaeuser Company 1.3%
Rockwell Automation Inc
1.3%
Evercore Inc 1.3%
Littelfuse Inc 1.3%
Essex Property Trust Inc 1.3%
Ralph Lauren 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 Midcap Value Index is an unmanaged index that measures the performance of those Russell Midcap companies with lower priceto-book ratios and lower forecasted growth values. The Index figures do not reflect any deduction for Fees, expenses, or taxes. It is not possible to invest directly in an unmanaged index

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 Value Holdings

November 2023*
December 2023*
January 2024*

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.

The method of calculation of the 30-Day Standardized Subsidized Yield is mandated by the Securities and Exchange Commission and is determined by dividing the net investment income per share earned during the last 30 days of the period by the maximum public offering price (“POP”) per share on the last day of the period. This number is then annualized. The 30-Day Standardized Subsidized Yield reflects fee waivers and/or expense reimbursements recorded by the Fund during the period. Without waivers and/or reimbursements, yields would be reduced. This yield does not necessarily reflect income actually earned and distributed by the Fund and, therefore, may not be correlated with the dividends or other distributions paid to shareholders. The 30-Day Standardized Unsubsidized Yield does not adjust for any fee waivers and/ or expense reimbursements in effect. If the Fund does not incur any fee waivers and/or expense reimbursements during the period, the 30-Day Standard Subsidized Yield and 30-Day Standardized Unsubsidized Yield will be identical.