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
- 34 years of experience
- Fund manager since Fund inception
Risk/Return
LOW - • - - - - - HIGHIn general, greater returns
are associated with greater risks.
Fund Statistics
| Inception Date | 12/12/94 |
|---|---|
| Ticker Symbol | CFSTX |
| Cusip | 200626109 |
| Minimum Initial Investment | $1,000 |
Commentary
| Total Fund Assets as of 6/30/2022 | $56,795,584 |
|---|---|
| Net Asset Value1 | $15.93 |
| Effective Duration2 | 2.45 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.
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.
The economy contracted sharply over the first half of 2022 as Russia’s Ukraine incursion and China’s zero Covid policy combined to rattle global markets. First quarter Gross Domestic Product (GDP) sank to -1.6% as headline inflation continued to climb and consumer spending declined. Full year GDP estimates now range between 1.5% and 1.9% as economists see interest rate increases raising the likelihood of a recession in the next 12 months.
Inflation, as measured by the Consumer Price Index (CPI), continued to climb throughout the quarter to 8.6% year-over-year through May. The Federal Reserve (Fed) responded by aggressively tightening monetary policy. The federal funds target was raised by 50 basis points in May and another 75 basis points in June to its current target range of 1.50% - 1.75%. Market participants anticipate continued aggressive hiking to raise the upper bound on federal funds to 3.25% - 3.50% by year end.
Inflation concerns and Fed action drove U.S. Treasury yields higher over the first quarter. Treasury yields rose more sharply in the short end of the curve (1 to 5 year maturities) relative to the long end (10 to 30 year maturities) over the period with the 5-year Treasury yield increasing to 3.03% from 2.46%.
For the second quarter, the Commerce Short Term Government Fund’s return of -1.16% underperformed the Bloomberg 1-5 Year Government Index return of -.85%. The Fund’s relative overweight to mortgages detracted from performance. The Fund’s shorter duration relative to that of its benchmark contributed to performance.