Missouri Tax-Free Intermediate Bond Fund
Overview
Objective
Seeks current income exempt from federal and, to the extent possible, from Missouri income taxes, as is consistent with the preservation of capital.Strategy
Focuses primarily on investing in municipal obligations issued by the State of Missouri and its political subdivisions.Fund Manager
Brian P. Musielak, CFA- Joined Commerce in 1995
- 26 years of experience
- Fund manager since 1999
Risk/Return
LOW - - • - - - - HIGHIn general, greater returns are associated with greater risks.
Fund Statistics
| Inception Date | 02/21/95 |
|---|---|
| Ticker Symbol | CFMOX |
| Cusip | 200626802 |
| Minimum Initial Investment | $1,000 |
Commentary
| Total Fund Assets as of 6/30/2021 | $392,781,749 |
|---|---|
| Net Asset Value1 | $20.20 |
| Effective Duration2 | 4.339 Yrs |
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. The Fund's investments may subject shareholders to federal alternative minimum tax. The investment income from this Fund may be subject to state income taxes.
Portfolio Holdings
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.
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.
Both the US Treasury and municipal curves finished flatter, as the Federal Reserve (the Fed) left rates unchanged. The Fed signaled potential rate hikes in 2023 and tapering of bond purchases entered discussions. Revising their Gross Domestic Product (GDP) and inflation forecasts higher encouraged short-term rates upward and pressured longer rates lower. The economy added jobs but below expectations. Unemployment declined below 6%. Employers struggled to fill job openings. As unemployment benefits expire, as vaccinations progress and as school resumes, job openings will likely come off historic highs. An infrastructure deal of nearly $580 billion was reached, however, negotiations will linger. Muni investor demand remained strong and new issuance supply increased 6% year-over-year at almost $224 billion. Municipal bond funds have experienced inflows of $59.5 billion year-to-date, according to JP Morgan. Taxable municipal new issuance comprised 25% of total new issuance and refunding deals made up one third of new supply. Municipal bonds underperformed US Treasuries. The 10-year Treasury yield decreased 27 bps (basis points) from 1.74% to 1.47% while the 10-year municipal yield decreased 13 bps from 1.12% to 0.99% during the quarter. The 10-year muni/treasury ratio increased to 67%. Credit spreads ended the quarter tighter. Bloomberg Barclay’s High Yield Muni Index outperformed their Investment Grade Index by 251 bps for the quarter. Longer bonds outperformed shorter bonds while GO (General Obligation) bonds underperformed revenue sectors. Lower quality bonds outperformed their higher quality counterparts.
For the second quarter, The Commerce Missouri Tax-Free Fund’s return of 0.89% underperformed the Bloomberg Barclays’ 3-15 Year Blend benchmark of 0.99%. Longer maturities were the most additive. Transportation and limited tax sectors performed the best. The Fund’s exposures to the pre-refunded and not-for-profit sectors lagged.