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
Scott Colbert, CFA- Joined Commerce in 1993
- 30 years of experience
- Fund manager since Fund inception
Risk/Return
LOW - • - - - - - HIGHIn 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
| Total Fund Assets as of 3/31/2020 | $63,029,673 |
|---|---|
| Net Asset Value1 | $17.30 |
| Effective Duration2 | 2.14 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.
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.
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.
As the global COVID-19 pandemic worsened, economic activity has suddenly slowed. While fourth quarter 2019 Gross Domestic Product (GDP) was 2.1% and followed a strong February 2020 employment report, March economic data was dire. Over 10 million workers filed for unemployment benefits in March. Economists expect annualized GDP to decline10%-40% in the second quarter, accompanied by an unemployment rate as high as 15%. Consensus is for a rapid second half rebound in GDP.
The Federal Reserve (Fed) moved aggressively to provide liquidity to financial markets. The federal funds rate was cut to a target range of 0% - 0.25% in two unscheduled decisions in March. The Federal Reserve began quantitative easing with purchases of U.S. Treasuries and mortgage backed securities.
U.S. Treasury rates moved sharply lower over the first quarter. The 5 Year Treasury fell to .38% from 1.69% at the beginning of the quarter.
For the first quarter, the Commerce Short Term Government Fund’s return of 2.07% underperformed the Bloomberg Barclays 1-5 Year Government Index return of 3.77%. The Fund’s shorter duration relative to the benchmark detracted from performance. The Fund’s relative overweight to mortgage-backed securities contributed to performance.
Unprecedented intervention by the Fed and by Congress through the $2.2 trillion CARES Act give hope that, while severe, we believe this economic downturn will be short and followed by a rapid recovery.