MidCap Growth Fund

Overview

Objective

Seeks capital appreciation.

Strategy

Invests in a diversified portfolio of equity securities of medium-sized companies that show the potential for above-average growth in earnings.

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 12/12/94
Ticker Symbol CFAGX
Cusip 200626505
Minimum Initial Investment $1,000

Commentary

The Russell MidCap Growth Index fell from its all-time high in September to levels not seen since Summer of 2017. We believe the sharp selloff resulted from signs of a slowing global economy paired with concerns that the US Federal Reserve (Fed) was tightening policy too fast. The Commerce MidCap Growth Fund fnished the quarter down -14.14%, outperforming the Russell MidCap Growth Index return of -15.99%

The Fund’s sector allocations supported the Fund’s relative performance. The Fund’s 1% underweight to the Energy Minerals sector (down 31%) beneftted the Fund’s performance. However, the Fund’s 2% underweight to the Retail Trade sector (only down -13%), slightly hurt the Fund’s performance. Stock selection contributed to the Fund’s relative performance.

The strongest stocks were Church & Dwight Co (1.33%), McCormick & Company (1.24%), and Extra Space Storage (1.26%), up 11%, 6%, and 5%, respectively. The Fund’s weakest stocks for the period were Best Buy Co. (1.15%), Eaton Vance Corp (1.22%), and BWX Technologies (0.00%) down -33%, -32%, and -31%, respectively.

During the quarter the Fund increased its position in the Producer Manufacturing sector from 8.4% to 10.1%, with the purchase of Armstrong World Industries (1.21%), which increased the Fund’s overweight to the sector. The Fund decreased its position to the Technology Services sector from 22.5% to 20.3% through the sale of RealPage Inc (0.00%) and ServiceNow (0.00%), eliminating the Fund’s overweight to the sector.
Total Fund Assets as of 12/31/2018 $145,848,765
Net Asset Value1 $34.23
Asset Allocation  
Equities 99.4%
Cash 0.6%
Weighted Average Market Capitalization 12.7 Billion

Holdings

Top Ten Equity Holdings2 as of 12/31/2018

Dollar General Corporation 1.4%
Nordson Corporation 1.4%
Ross Stores, Inc 1.4%
Black Knight, Inc. 1.4%
Sealed Air Corporation 1.4%
Church & Dwight Co, Inc. 1.3%
FleetCor Technologies 1.3%
SS&C Technologies Holdings, Inc. 1.3%
Cadence Design Systems, Inc. 1.3%
International Flavors & Fragrance 1.3%

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 invests in mid-capitalization securities. The securities of mid-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements.

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 MidCap Growth Holdings

January 2019*
February 2019*
March 2019*

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.

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