Value Fund

Overview

Objective

Seeks capital appreciation and, secondarily, current income.

Strategy

Invests in a diversified portfolio of equity securities of companies that represent excellent value relative to their current price. The Fund seeks a higher return than the market index over time as the stocks it purchases rise in price to more normal valuations.

The Management Team

The Fund is managed by the Equity Strategy Team, a group of senior-level investment professionals who average 31 years of experience.

Risk/Return

LOW - - - • - - - HIGH

In general, greater returns are associated with greater risks.

Fund Statistics

Inception Date 03/03/97
Ticker Symbol CFVLX
Cusip 200626828
Minimum Initial Investment $1,000

Commentary

In the first quarter of 2017 we saw a continuation of the stock market rally after President Trump’s win, and withstood the Federal Reserve (Fed) tightening monetary policy by raising short term interest rates in March. For the Quarter the Commerce Value Fund returned 1.51% trailing the Russell 1000 Value Index return of 3.27%.

The Fund’s security selection had the largest negative impact on the Fund’s underperformance. The top detractor of performance was from the Retail Trade sector with Target Corporation (0.00%), Macy’s Inc. (1.54%), and Kohl’s Corporation (1.28%) returning -23.12%, -16.22%, and -18.25%, respectively. The Finance sector also detracted from performance with Kimco Realty Corporation (1.94%), and Weingarten Realty Investors (0.00%) returning -12.2%, and -10.84%, respectively. Strong performance from HP Inc. (2.01%), and Tupperware Brands Corporation (1.95%) helped offset some of the underperformance of the Fund returning 21.14% and 20.53%.

Our underweight positions in the Energy Minerals, Finance and Industrial Services sectors, helped the Fund to offset some of the security selection underperformance. Although, overweight positions in Retail Trade and Communications detracted performance.

The Fund continues to maintain a portfolio of around 45 stocks that are quality companies with attractive valuations and dividend yields providing both capital appreciation and current income.

Total Fund Assets as of 03/31/2017 $282,717,205
Net Asset Value1 $31.92
Asset Allocation  
Equities 99.3%
Cash 0.7%
Weighted Average Market Capitalization $130.84 Billion

Holdings

Top Ten Equity Holdings2 as of 03/31/2017

Chevron Corporation 4.4%
Wells Fargo & Company 3.9%
AT&T Inc. 3.9%
General Electric Company 3.4%
JP Morgan Chase & Company 3.4%
Exxon Mobil Corporation 3.4%
Merck & Company Inc 2.9%
Pfizer Inc 2.9%
Johnson & Johnson 2.9%
iShares Russell 1000 Value 2.0%

Footnotes:
1. The Net Asset Value represents the assets of the fund (ex dividend) by the total number of shares.
2. The composition of the portfolio is subject to change in the future.
3. The Russell 1000 Growth Index is an unmanaged index that measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Index figures do not reflect any fees or expenses.

Portfolio Holdings

The Fund is subject to market risk so that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular industry sectors and/or general economic conditions.

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 Value Fund Holdings

March, 2017*
April, 2017*
May, 2017*

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.