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Short-Term Government Fund
Overview
Objective
Seeks current income consistent with preservation of principal.
Strategy
Invests primarily in U.S. Government securities and government mortgage-backed securities.
Fund Manager
The Fund is managed by the Fixed
Income Team, a group of senior-level
investment professionals who average
29 years of experience.
Risk/Return
LOW - • - - - - - HIGH
In general, greater returns are associated with greater risks.
The Short-Term Government Fund's net asset value and yield are not guaranteed by the U.S. Government or by its agencies, instrumentalities or sponsored enterprises.
Fund Statistics
| Inception Date | 12/12/94 |
|---|---|
| Ticker Symbol | CFSTX |
| Cusip | 200626109 |
| Minimum Initial Investment | $1,000 |
Commentary
Early market consensus estimates project US Gross Domestic Product (GDP) growth of 2.40% annualized for the fourth quarter of 2024. The economy is expected to have grown a healthy 2.50% for the full year, sustained by strong consumer spending and relatively low unemployment.
As expected, the Federal Reserve (Fed) delivered two cuts to the federal funds target rate, one at each of the November and December meetings. The current fed funds range stands at 4.25% - 4.50%. Reflecting a view of balanced risks to its dual employment and inflation mandate, the Fed’s December policy statement, press conference, and summary of economic conditions all hinted at fewer rate cuts occurring at a slower pace over 2025.
The Fed’s policy stance, a core personal consumption expenditures (PCE) inflation measure stubbornly above the target 2.00% ( 2.80% for both October and November), and the November election results combined to drive treasury bond yields sharply higher over the fourth quarter. The yield on the five-year treasury bond increased 83 basis points to 4.38% at year end.
For the fourth quarter, the Commerce Short Term Government Fund’s return of -0.28% outperformed the Bloomberg US 1-5 Year Government Bond Index return of -0.81%. Having a shorter duration relative to the benchmark early in the quarter contributed to performance as rates rose. The Fund’s overweight to mortgages detracted from performance.
| Total Fund Assets as of 12/31/2024 | $29,820,649 |
|---|---|
| Net Asset Value1 | $16.02 |
| Effective Duration2 | 2.33 Yrs. |
Footnotes:
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.
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 Short-Term Government Holdings
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.