National Tax-Free Intermediate Bond Fund



Seeks current income exempt from federal income tax consistent with the preservation of capital.


Focuses on a broad range of investment-grade municipal securities, typically issued by or on behalf of the states, territories and possessions of the United States, the District of Columbia, and their respective authorities, agencies, instrumentalities and political subdivisions.

Fund Manager

Brian P. Musielak, CFA

  • Joined Commerce in 1995
  • 22 years of experience
  • Fund Manager since 1999


LOW - - • - - - - HIGH

In general, greater returns are associated with greater risks.

Fund Statistics

Inception Date 02/21/95
Ticker Symbol CFNLX
Cusip 200626703
Minimum Initial Investment $1,000


During the third quarter, US economy recovered strongly. Consumer confidence and employment continued to improve. Housing has been especially robust with pending home sales up 21% year-over-year. However, the pandemic still looms large and has reaccelerated in parts of the country, notably in the Midwest. Virus containment is unlikely until an effective vaccine can be widely distributed while limited quantities could be made available before the end of the year via the FDA’s Emergency Use Authorization. Negotiations are on-going with congressional leaders regarding fiscal stimulus of another package in the $2 trillion realm. The Federal Reserve (Fed) has committed to keeping the Fed Funds rate at the zero bound through the end of 2023. Municipal bonds outperformed US Treasuries while both curves steepened modestly. The 10-year Treasury yield increased 3 bps (basis points) from 0.66% to 0.69% while the 10-year municipal yield decreased 3 bps from 0.90% to 0.87% during the quarter. The 10-year muni/treasury ratio decreased to 126%. Credit spreads continued to tighten during the quarter. Bloomberg Barclay’s high yield muni index outperformed their investment grade index by 186 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 third quarter, The Commerce National Tax-Free Fund’s return of 0.96% underperformed the Bloomberg Barclays’ 3-15 Year Blend benchmark of 1.23%. Intermediate maturities were the most additive. Higher education and hospital sectors performed the best. The Fund’s exposures to the pre-refunded and housing sectors lagged.

Total Fund Assets as of 9/30/2020 $455,564,485
Net Asset Value1 $20.53
Effective Duration2 4.54 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, and investment income may be subject to state income taxes.

Portfolio Holdings

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. These risks may result in greater share price volatility.

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 National Tax-Free Intermediate Bond Holdings

August 2020*
September 2020*
October 2020*

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.