<PAGE>
THE COMMERCE FUNDS (TM)
THE SHORT-TERM GOVERNMENT FUND
THE BOND FUND
THE BALANCED FUND
THE GROWTH AND INCOME FUND
THE GROWTH FUND
THE MIDCAP FUND
THE INTERNATIONAL EQUITY FUND
INSTITUTIONAL SHARES
----------------
SUPPLEMENT DATED MAY 29, 1998 TO THE PROSPECTUS DATED MARCH 2, 1998
Effective May 29, 1998, the sales charge will be removed from Institutional
Shares of the Short-Term Government, Bond, Balanced, Growth and Income,
Growth, MidCap and International Equity Funds. Therefore, all references to
the sales charge in the Institutional Shares Prospectus of the Funds are
deleted.
The Expense Table on page 3 of the Prospectus is deleted and replaced in its
entirety with the following:
EXAMPLE: Assume a Fund's annual return is 5% and its expenses are the same as
those stated above. For every $1,000 you invest, here's how much you would pay
in total expenses if you closed your account after the number of years
indicated, assuming redemption at the end of each time period.
<TABLE>
<CAPTION>
SHORT-TERM GROWTH AND
GOVERNMENT BOND BALANCED INCOME GROWTH MIDCAP INTERNATIONAL
FUND FUND FUND FUND FUND FUND EQUITY FUND
---------- ---- -------- ---------- ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
One Year....... $ 7 $ 9 $ 12 $ 12 $ 11 $ 13 $ 17
Three Years.... $22 $ 27 $ 36 $ 38 $ 35 $ 39 $ 52
Five Years..... $38 $ 47 $ 62 $ 66 $ 61 $ 68 $ 90
Ten Years...... $85 $105 $137 $145 $135 $149 $195
</TABLE>
****
The following is to be inserted after the section entitled "Additional Risk
Considerations--Other Investment Policies and Risk Considerations" on page 24
of the Prospectus:
YEAR 2000 RISKS
Like other investment companies, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers
do not properly process and calculate date-related information and data
from and after January 1, 2000. This is commonly known as the "Year 2000
Problem." The Adviser is taking steps to address the Year 2000 Problem with
respect to the computer systems that it uses and to obtain assurance that
comparable steps are being taken by the Fund's other major service
providers. At this time, however, there can be no assurance that these
steps will be sufficient to avoid any adverse impact on the Fund as a
result of the Year 2000 Problem.
****
<PAGE>
The following sentence is added to the end of the second paragraph of the
section entitled "Other Information--About the Commerce Funds" on page 46 of
the Prospectus:
"Shares of the Service Class of each Fund and the Institutional Shares of
the National Tax-Free Intermediate Bond and Missouri Tax-Free Intermediate
Bond Funds bear a front-end sales charge of 3.50% (2.00% of the Short-Term
Government Fund's Service Shares), whereas Institutional Shares of the
Short-Term Government, Bond, Balanced, Growth, Growth and Income, MidCap
and International Equity Funds do not bear a sales charge."
****
The last sentence of the last paragraph on Page 25 of the Prospectus is
deleted in its entirety and replaced with the following:
"The minimum investment for SEP, SIMPLE IRAS and Section 403(b) tax
sheltered annuities is generally $50.00."
<PAGE>
THE COMMERCE FUNDS
STATEMENT OF ADDITIONAL INFORMATION
INSTITUTIONAL SHARES
SERVICE SHARES
THE SHORT-TERM GOVERNMENT FUND
THE BOND FUND
THE BALANCED FUND
THE GROWTH AND INCOME FUND
THE GROWTH FUND
THE MIDCAP FUND
THE INTERNATIONAL EQUITY FUND
----------------
INSTITUTIONAL SHARES
NATIONAL TAX-FREE INTERMEDIATE BOND FUND
MISSOURI TAX-FREE INTERMEDIATE BOND FUND
SUPPLEMENT DATED MAY 29, 1998 TO PROSPECTUS DATED MARCH 2, 1998, AS
SUPPLEMENTED
Effective May 29, 1998, the sales charge on Institutional Shares of the
Short-Term Government, Bond, Balanced, Growth and Income, Growth, MidCap and
International Equity Funds will be removed. Therefore, all references to the
sales charge in the Statement of Information are deleted.
The Tables set forth on Pages 34 and 35 of the Statement of Additional
Information are hereby deleted and replaced with the following:
TABLE
<TABLE>
<CAPTION>
BOND FUND BALANCED FUND GROWTH & INCOME FUND GROWTH FUND
--------------------- ---------------------- ---------------------- ----------------------
INSTITUTIONAL SERVICE INSTITUTIONAL SERVICE INSTITUTIONAL SERVICE INSTITUTIONAL SERVICE
------------- ------- ------------- -------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets (in 000s).... $ 217,803 $ 739 $ 105,782 $ 1,219 $ 45,173 $ 2,588 $ 343,773 $ 5,758
Number of Shares
Outstanding............ 11,207,266 38,047 3,966,282 45,717 2,070,789 118,667 9,953,941 166,880
Net Asset Value Per
Share.................. $ 19.43 $ 19.43 $ 26.67 $ 26.66 $ 21.82 $ 21.81 $ 34.54 $ 34.50
Sales Charge, 3.50
percent of offering
price (3.63 percent of
net asset value per
share)................. N/A $ 0.70 N/A $ 0.97 N/A $ 0.79 N/A $ 1.25
Offering Price to
Public................. $ 19.43 $ 20.13 $ 26.67 $ 27.63 $ 21.82 $ 22.60 $ 34.54 $ 35.75
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL NATIONAL MISSOURI
MIDCAP FUND EQUITY FUND TAX-FREE TAX-FREE
--------------------- --------------------- INTERMEDIATE INTERMEDIATE
INSTITUTIONAL SERVICE INSTITUTIONAL SERVICE BOND FUND BOND FUND
------------- ------- ------------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Assets (in 000s).... $ 112,442 $ 658 $ 78,273 $ 231 $ 25,281 $ 24,434
Number of Shares
Outstanding............ 3,404,956 19,980 3,541,115 10,449 1,341,115 1,312,685
Net Asset Value Per
Share.................. $ 33.02 $ 32.94 $ 22.10 $ 22.06 $ 18.85 $ 18.61
Sales Charge, 3.50
percent of offering
price (3.63 percent of
net asset value per
share)................. N/A $ 1.19 N/A $ 0.80 $ 0.68 $ 0.67
Offering Price to
Public................. $ 33.02 $ 34.13 $ 22.10 $ 22.86 $ 19.53 $ 19.28
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SHORT-TERM
GOVERNMENT FUND
---------------------
INSTITUTIONAL SERVICE
------------- -------
<S> <C> <C>
Net Assets (in 000s)..................................... $ 48,840 $ 450
Number of Shares Outstanding............................. 2,643,812 24,359
Net Asset Value Per Share................................ $ 18.47 $ 18.47
Sales Charge, 2.00 percent of offering
price (2.04 percent of net asset value per
share).................................................. N/A $ 0.38
Offering Price to Public................................. $ 18.47 $ 18.85
</TABLE>
<PAGE>
THE COMMERCE FUNDS(TM)
THE SHORT-TERM GOVERNMENT FUND
THE BOND FUND
THE BALANCED FUND
THE GROWTH AND INCOME FUND
THE GROWTH FUND
THE MIDCAP FUND
THE INTERNATIONAL EQUITY FUND
SERVICE SHARES
----------------
SUPPLEMENT DATED MAY 29, 1998 TO THE PROSPECTUS DATED MARCH 2, 1998
The following is to be inserted after the section entitled "Additional Risk
Considerations--Other Investment Policies and Risk Considerations on page 23
of the Prospectus:"
YEAR 2000 RISKS
Like other investment companies, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers
do not properly process and calculate date-related information and data
from and after January 1, 2000. This is commonly known as the "Year 2000
Problem." The Adviser is taking steps to address the Year 2000 Problem with
respect to the computer systems that it uses and to obtain assurance that
comparable steps are being taken by the Fund's other major service
providers. At this time, however, there can be no assurance that these
steps will be sufficient to avoid any adverse impact on the Fund as a
result of the Year 2000 Problem.
* * * *
The following sentence is added to the end of the second paragraph of the
section entitled "Other Information--About the Commerce Funds" on page 45 of
the Prospectus:
"Shares of the Service Class of each Fund and the Institutional Shares of
the National Tax-Free Intermediate Bond and Missouri Tax-Free Intermediate
Bond Funds bear a front-end sales charge of 3.50% (2.00% of the Short-Term
Government Fund's Service Shares), whereas Institutional Shares of the
Short-Term Government, Bond, Balanced, Growth, Growth and Income, MidCap
and International Equity Funds do not bear a sales charge."
* * * *
The last sentence of the last paragraph on Page 24 of the Prospectus is
deleted in its entirety and replaced with the following:
"The minimum investment for SEP, SIMPLE IRAs and Section 403(b) tax
sheltered annuities is generally $50.00."
<PAGE>
THE COMMERCE FUNDS(TM)
THE NATIONAL TAX-FREE INTERMEDIATE BOND FUND
THE MISSOURI TAX-FREE INTERMEDIATE BOND FUND
INSTITUTIONAL SHARES
----------------
SUPPLEMENT DATED MAY 29, 1998 TO THE PROSPECTUS DATED MARCH 2, 1998
The following is to be inserted after the section entitled "Additional Risk
Considerations--Other Investment Policies and Risk Considerations on page 7 of
the Prospectus:"
YEAR 2000 RISKS
Like other investment companies, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers
do not properly process and calculate date-related information and data
from and after January 1, 2000. This is commonly known as the "Year 2000
Problem." The Adviser is taking steps to address the Year 2000 Problem with
respect to the computer systems that it uses and to obtain assurance that
comparable steps are being taken by the Fund's other major service
providers. At this time, however, there can be no assurance that these
steps will be sufficient to avoid any adverse impact on the Fund as a
result of the Year 2000 Problem.
* * * *
Effective April 17, 1998, Scott Colbert has replaced Craig Macpherson as the
day-to-day manager of the Funds' investments. The second paragraph of the
section entitled "Service Providers--More about the Advisor" on page 23 of the
Prospectus is hereby deleted and replaced in its entirety with the following:
Scott Colbert, CFA and Vice President, is the person primarily
responsible for the day-to-day management of each Fund's investments. Mr.
Colbert joined the Investment Management Group of Commerce Bank, N.A. in
1993. He served as portfolio manager for ARMCO Investment Management, Inc.
from 1987-1993, managing fixed-income investments for employee benefit,
insurance and endowment funds.
