Bond Fund
Overview
Objective
Seeks total return through current income and, secondarily, capital appreciation.
Strategy
Invests primarily in a broad range of government and investment-grade corporate bonds and other fixed-income securities.
Fund Manager
The Fund is managed by the FixedIncome 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.
Fund Statistics
| Inception Date | 12/12/94 |
|---|---|
| Ticker Symbol | CFBNX |
| Cusip | 200626208 |
| Minimum Initial Investment | $1,000 |
Commentary
| Total Fund Assets as of 9/30/2024 | $1,207,391,301 |
|---|---|
| Net Asset Value1 | $18.25 |
| Effective Duration2 | 6.16 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, which may result in greater share price volatility. Asset-backed securities may be less liquid than other securities and therefore more difficult to value and liquidate, if necessary. Foreign investments may be more volatile than investment in U.S. securities and will be subject to the risks of currency fluctuations and political developments.
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.
S&P Global projects US economic growth to have slowed to a 2.80% annualized rate for the third quarter of 2024 from 3.00% in the second quarter. Fourth quarter estimates for GDP are trending lower as the conflict in the Middle East escalates and oil prices trend higher.
Citing a weakening labor market and progress on lower inflation in its statement, the Federal Reserve (Fed) cut the target federal funds rate by 50 basis points to 4.75%-5.00% at its September meeting. Indeed, non-farm payroll increases were less than 150,000 for both July and August. The September payroll number, reported the first Friday in October, reversed the trend with a surprising gain of over 250,000 jobs. The unemployment rate fell from 4.30% in July to 4.10% by quarter end. The market now expects two rate cuts by year-end as the Fed works to balance risks to its dual mandate.
The bond market anticipated the Fed’s action early in the quarter. Five and ten-year treasury bond yields decreased 45 basis points and 37 basis points respectively in July alone on softening employment data. The yield on the ten-year treasury decreased a total of 58 basis points over the quarter to end at 3.81%. The third quarter also saw the yield curve finally un-invert on September 24 for the first time in over two years.
For the third quarter, The Commerce Bond Fund’s return of 4.92% underperformed the Bloomberg US Aggregate Bond Index of 5.20%. The Fund’s underweight to mortgage bonds detracted from performance. The Fund’s over-weight to corporate contributed to performance.
Overall, a healthy and sustainable economic expansion continues. The September non-farm payroll report was unexpectedly strong and included positive revisions for the previous two months. Interest rate futures and market commentary post the report bring into question the necessity and size of future rate cuts. The economy may have moved from a “soft landing” to a “no landing” scenario.