<PAGE>
THE COMMERCE FUNDS
Semi-Annual Report - April 30, 2000
[LOGO OF COMMERCE FUNDS]
<PAGE>
Building on Your Values
The value of a shared perspective
At The Commerce Funds, we have a simple, straightforward mission: to build
relationships that have lasting value to our clients.
We achieve our mission by keeping our focus squarely on what matters most: the
financial success and well-being of the customers we serve. At The Commerce
Funds, looking at the world through our customers' eyes has helped us to create
a family of mutual funds designed to assist you in meeting the financial
challenges that lie ahead.
The power of professional commitment
Behind each of The Commerce Funds is a consistent, long-term investment
philosophy and a commitment to the highest investment standards. Our success in
helping investors like you reach their financial goals has proven the wisdom of
this careful, disciplined approach to investing.
Your relationship with The Commerce Funds is built on a foundation of shared
values and many years of investment experience. Working from this solid
foundation, we're equipped to help our customers meet the challenge of investing
for a lifetime.
Strength, insight, and service: good reasons to invest with The Commerce Funds.
The Commerce Funds
International Equity
MidCap
Growth
Growth and Income
Balanced
RISK POTENTIAL
Missouri Tax-Free RETURN
Intermediate Bond
National Tax-Free
Intermediate Bond
Bond
Short-Term Government
In general, greater returns are associated with greater risks.
<PAGE>
COMMERCE FUNDS
Shareholder Letter
Dear Shareholder:
We are pleased to provide you with the Semi-Annual Report on The Commerce
Funds. In this report, you will find performance and financial information on
the nine Commerce Funds. The portfolio management team of each Fund also pro-
vides a review of the factors that have affected performance. To help you put
that information in context, we offer the following economic and financial
market update.
Economic and Market Update
Events in the economy and financial markets are unfolding
much as we anticipated. For over a year, it has been our
view that the U.S. economy would remain strong, the rest of
the world would begin to see renewed growth, and the Fed-
eral Reserve would have to act in late 1999 and into 2000
to counter potential inflationary price pressures. As noted
in our annual letter, this condition began to unfold last
fall. As we move through the first half of 2000, the Fed-
eral Reserve has increased the Federal Funds rate three
more times and financial markets are now in the process of
adjusting to this reality. How events develop from here de-
pends greatly on upcoming economic reports and market con-
ditions. At this moment, it is our assessment that the
Federal Reserve is approaching the end of this current cy-
cle of rate increases.
It is our current expectation that the U.S. economy will
begin to experience a moderation in economic activity in
the second quarter that will extend into the second half of
2000. Monetary policy has been gradually tightened over the
past year, and we are just now seeing the first early signs
of its effect. Monetary policy works with a lag. The first
effects are normally on the financial system, which we are
now seeing, and subsequently on the real economy. As eco-
nomic activity moderates, budding price pressures should
recede. We do not anticipate a major upturn in inflation.
One exception could be in the area of energy. Higher gaso-
line prices seem assured over the summer months as tight
inventories and a lagging increase in crude oil output com-
bine to create a supply problem. At the same time, natural
gas prices are soaring and the potential of a shortage as
we enter the fall and winter months becomes more of a pos-
sibility. This is due to the continued strong growth in de-
mand and underinvestment in new production over the past
several years.
The U.S. equity market finished 1999 on a very strong note,
despite concerns about the Y2K problem, and after a brief
dip in the first several weeks of 2000, roared into March.
It was at that point that the tenor of the equity market
began to change. The NASDAQ hit its peak on March 10 after
a spectacular rally from the lows of last fall of close to
85%. The S&P 500 hit its peak several weeks later. The U.S.
markets are now in a full blown correction as investors
grapple with higher interest rates, lower liquidity, and
the potential of an economic slowdown and its impact on
earnings growth. The highflying technology sector is in the
process of a significant correction, while some of the lag-
gard sectors of the past several years have started to per-
form better. There has been a clear preference for "value"
sectors as opposed to "growth" sectors over the last sev-
eral months.
1
<PAGE>
COMMERCE FUNDS
The fixed-income market has also been buffeted by the rise
in inflation expectations and Federal Reserve actions.
Yields have continued to rise across the maturity spectrum
with most of the damage in the short to intermediate matu-
rities. One unusual aspect of today's market is the influ-
ence of the announced Treasury buy-back program. While not
unexpected, the timing and amount caught many investors off
guard. This has led to substantial outperformance of U.S.
government securities relative to private debt. Addition-
ally, the increased risk of economic or financial problems
stemming from the Federal Reserve's attempt to slow the
U.S. economy has caused investors to demand higher yields
from the corporate sector.
We continue to expect much volatility over the coming
months as the markets deal with the increased uncertainty.
On the other hand, we believe the downside in both the eq-
uity and fixed-income markets is limited from here, but
that on balance, not much net progress will be made. As we
noted in this year's edition of Investments: The Long Term
Outlook, ". . . the easy money in the U.S. equity market
has been made." In this environment, it is important to
maintain one's perspective and long-term objectives. The
environment and current market conditions also put a high
premium on risk management and selectivity.
As always, we appreciate your investment, and we look for-
ward to being a part of your investment future for years to
come.
Sincerely,
Gary D. Campbell
Chief Investment Officer
Investment Management Group
Commerce Bank, N.A.
2
<PAGE>
COMMERCE SHORT-TERM GOVERNMENT FUND
Short-Term Government Fund Overview
Dear Shareholder,
We are pleased to report on the performance of the Commerce Short-Term Gov-
ernment Fund (the "Fund") for the six-month period ended April 30, 2000.
Performance Review
For the six-month period ended April 30, 2000, the Institu-
tional Shares of the Fund had a cumulative total return of
1.62%, based on Net Asset Value (NAV) (assumes fee waivers
and expense reimbursements). The Service Shares had a cumu-
lative total return, without sales charge, of 1.44% for the
same period based on NAV (assumes fee waivers and expense
reimbursements). This compares to the Lipper Short-Term
Government Funds Index six-month cumulative return of 1.91%
and Salomon Brothers 1-5 Year Treasury/Government Sponsored
Index six-month cumulative return of 1.58%. Past perfor-
mance is no guarantee of future results. (The Fund's NAV
and yield are not guaranteed by the FDIC or the U.S. Gov-
ernment or by its agencies, instrumentalities, or sponsored
enterprises.)
Portfolio Highlights
.This continues to be a challenging year for the fixed-in-
come market. With continuing strength of the economy and
an increase in inflation, interest rates have risen
through the first part of 2000. We have also seen short-
term interest rates rising faster than long-term rates,
resulting in an inverted yield curve.
.As short-term interest rates rose above long-term rates,
we sold some of our securities with longer maturity dates
and reinvested both cash and the proceeds of our sales in
the highest-yielding sector of the yield curve.
.Looking ahead, we believe the Fund's portfolio is well-po-
sitioned relative to its benchmark in terms of yield. We
believe the Fund will benefit when mortgage and agency in-
terest rate differentials begin to compress relative to
U.S. Treasuries.
We thank you for your investment and look forward to your
continued confidence.
Sincerely,
Fixed-Income Funds Team
Investment Management Group
Commerce Bank, N.A.
May 26, 2000
3
<PAGE>
COMMERCE SHORT-TERM GOVERNMENT FUND
Statement of Investments
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Collateralized Mortgage Obligations - 30.0%
Bear Stearns Mortgage Securities, Inc. Series 1998-1, Class A17
$ 250,000 5.00% 03/25/2028 $ 188,174
Chase Mortgage Finance Corp. Series 1999-S1, Class A17
250,000 6.75 02/25/2029 215,000
Countrywide Home Loans, Inc. Series 1997-4, Class A
330,536 8.00 07/25/2027 328,972
Federal Home Loan Mortgage Corp. REMIC PAC Series 1205, Class G
180,183 7.00 03/15/2007 178,042
Federal Home Loan Mortgage Corp. REMIC PAC Series 1255, Class G
85,774 7.50 07/15/2021 86,015
Federal Home Loan Mortgage Corp. REMIC PAC Series 1407, Class PH
29,732 6.75 05/15/2018 29,658
Federal Home Loan Mortgage Corp. REMIC PAC Series 1526, Class N
602,768 6.50 12/15/2022 596,928
Federal Home Loan Mortgage Corp. REMIC PAC Series 1619, Class EC
493,683 5.60 11/15/2023 485,349
Federal Home Loan Mortgage Corp. REMIC PAC Series 1621, Class K
230,000 6.50 11/15/2023 210,450
Federal Home Loan Mortgage Corp. REMIC PAC Series 1624, Class EA
295,592 5.50 01/15/2007 293,744
Federal Home Loan Mortgage Corp. REMIC PAC Series 1727, Class KA
769,019 6.50 05/15/2024 764,451
Federal Home Loan Mortgage Corp. REMIC PAC Series 2047, Class A
107,286 6.75 05/15/2027 103,545
Federal Home Loan Mortgage Corp. REMIC PAC Series 2103, Class TE
625,000 6.00 12/15/2028 540,819
Federal Home Loan Mortgage Corp. REMIC PAC Series 2109, Class PE
700,000 6.00 12/15/2028 606,592
Federal Home Loan Mortgage Corp. REMIC PAC Series 44, Class E
459,085 9.00 11/15/2019 464,250
Federal Home Loan Mortgage Corp. REMIC Series 1574, Class P
16,273 6.50 07/15/2023 15,937
Federal Home Loan Mortgage Corp. REMIC Series 1617, Class C
149,000 6.50 02/15/2023 139,175
Federal Home Loan Mortgage Corp. REMIC Series 1632, Class B
200,000 6.00 11/15/2023 177,312
Federal Home Loan Mortgage Corp. REMIC Series 1727, Class E
357,818 6.50 04/15/2018 356,362
Federal Home Loan Mortgage Corp. Series 1650, Class K
880,000 6.50 01/15/2024 802,634
--------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Collateralized Mortgage Obligations - (continued)
Federal Home Loan Mortgage Corp. Series 1652, Class PJ
$ 500,000 6.60% 08/15/2022 $ 484,840
Federal National Mortgage Assn. REMIC PAC Series 1991-118, Class K
102,844 7.00 08/25/2021 102,201
Federal National Mortgage Assn. REMIC PAC Series 1993-208, Class L
8,520 6.50 03/25/2023 8,469
Federal National Mortgage Assn. REMIC PAC Series 1993-209, Class E
150,865 5.75 07/25/2005 150,062
Federal National Mortgage Assn. REMIC PAC Series 1994-76, Class E
486,217 5.00 02/25/2022 480,139
Federal National Mortgage Assn. REMIC PAC Series 1996-28, Class PE
281,000 6.50 03/25/2020 275,116
Federal National Mortgage Assn. REMIC PAC Series G92-35, Class D
134,725 4.50 08/25/2021 130,303
Federal National Mortgage Assn. REMIC PAC Series G93-16, Class H
360,000 4.59 04/25/2021 314,435
Federal National Mortgage Assn. REMIC Series 1992-1, Class E
273,419 7.50 01/25/2007 272,563
Federal National Mortgage Assn. REMIC Series 1993-130, Class H
510,000 6.30 09/25/2018 504,579
Federal National Mortgage Assn. REMIC Series 1993-225, Class NB
497,809 6.50 12/25/2022 483,651
Federal National Mortgage Assn. REMIC Series 1993-245, Class N
200,000 6.50 12/25/2023 188,750
Federal National Mortgage Assn. REMIC Series 1994-23, Class A
35,257 6.00 12/25/2022 34,959
Federal National Mortgage Assn. REMIC Series G94-9, Class C
39,522 6.25 04/17/2010 39,250
Federal National Mortgage Assn. REMIC Series X-225, Class G
630,334 6.50 11/25/2022 575,065
Federal National Mortgage Assn. REMIC Series X-225, Class NC
3,229,000 6.50 03/25/2023 3,032,225
Federal National Mortgage Assn. Series 1993-109, Class TC
1,004,477 7.00 01/25/2011 999,766
Federal National Mortgage Assn. Series 1993-139, Class KB
217,555 7.00 11/25/2000 216,739
Federal National Mortgage Assn. Series 1993-183, Class K
500,000 6.50 07/25/2023 458,125
Federal National Mortgage Assn. Series 1993-76, Class A
284,299 6.00 06/25/2008 276,302
Federal National Mortgage Assn. Series 1995-19, Class L
171,021 6.25 08/25/2008 157,767
Federal National Mortgage Assn. Series 1997-58, Class DC
700,000 7.00 01/20/2013 662,375
--------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
COMMERCE SHORT-TERM GOVERNMENT FUND
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Collateralized Mortgage Obligations - (continued)
Federal National Mortgage Assn. Series 1997-58, Class G
$1,341,666 6.50% 03/20/2023 $ 1,324,466
Federal National Mortgage Assn. Series 1998-63, Class PL
530,000 6.00 11/25/2027 463,580
GE Capital Mortgage Services, Inc. Series 1993-16, Class A4
10,970 6.25 12/25/2023 10,894
GE Capital Mortgage Services, Inc. Series 1997-9, Class 2A7
838,728 7.00 10/25/2027 831,910
Prudential Home Mortgage Securities Co. REMIC PAC Series 1993-3, Class A6
2,576,962 7.40 02/25/2008 2,566,474
Prudential Home Mortgage Securities Co. Series 1993-28, Class M
1,160,988 7.38 08/25/2023 1,110,126
Residential Accredit Loans, Inc. Series 1997-QS07, Class A4
2,000,000 7.50 07/25/2027 1,965,000
Residential Accredit Loans, Inc. Series 1997-QS08, Class A6
482,545 7.25 08/25/2027 480,132
Residential Accredit Loans, Inc. Series 1999-QS02, Class A5
1,000,000 6.50 02/25/2029 835,000
Residential Asset Securitization Trust Series 1997-A7, Class A5
1,865,300 7.50 09/25/2027 1,847,803
Residential Funding Mortgage Securities Series 1993-S49,
Class A2
231,222 6.00 12/25/2008 228,764
Residential Funding Mortgage Securities I, Inc. REMIC Series 1995-S12,
Class A2
850,298 7.25 08/25/2010 830,103
Residential Funding Mortgage Securities I, Inc. REMIC Series 1997-S3,
Class A3
240,133 7.30 03/25/2007 239,170
Saxon Mortgage Securities Corp. REMIC Series 1993-8A,
Class 1A5
500,000 7.38 09/25/2023 469,195
Securitized Asset Sales, Inc. Series 1993-7, Class TA6
470,000 6.25 12/25/2023 430,050
-----------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(cost $31,072,645) $ 30,063,757
-----------------------------------------------------------------------------------------------
Mortgage-Backed Pass-Through Obligations - 7.2%
Federal Home Loan Mortgage Corporation (FHLMC)
$ 8,737 8.75% 02/01/2001 $ 8,683
11,913 8.75 04/01/2001 11,812
58,221 8.25 08/01/2001 56,856
63,612 7.75 09/01/2007 63,180
Federal National Mortgage Association (FNMA)
639,284 6.50 04/01/2003 627,776
5,000,000 4.75 11/14/2003 4,615,600
227,621 8.00 12/01/2007 228,042
256,339 6.50 02/01/2012 247,921
92,768 9.00 07/01/2024 95,805
863,338 5.82 12/01/2028 826,785
-----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Mortgage-Backed Pass-Through Obligations - (continued)
Government National Mortgage Association (GNMA)
$ 150,757 8.00% 10/15/2016 $ 152,244
284,293 8.00 07/15/2017 286,957
-----------------------------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED PASS-THROUGH
OBLIGATIONS
(cost $7,267,520) $ 7,221,661
-----------------------------------------------------------------------------------------------
U.S. Government Agency Obligations - 62.0%
Detroit MI U.S. Government Guarantee Note Series A11
$ 100,000 6.44% 08/01/2002 $ 98,180
Federal Agricultural Mortgage Corporation
6,000,000 5.80 05/03/2000 5,998,030
Federal Farm Credit Bank
1,000,000 6.10 11/19/2001 986,090
Federal Home Loan Bank
3,000,000 5.63 03/19/2001 2,973,750
1,250,000 7.44 08/10/2001 1,254,687
3,000,000 5.88 08/15/2001 2,957,340
1,000,000 6.53 08/28/2001 992,500
1,750,000 6.63 08/28/2001 1,743,940
965,000 7.56 02/27/2002 971,485
4,000,000 7.17 07/22/2002 4,000,000
2,000,000 5.13 09/15/2003 1,875,320
1,630,000 6.89 04/06/2004 1,608,093
Federal Home Loan Mortgage Corporation
1,000,000 6.52 08/25/2000 999,840
500,000 6.70 07/25/2001 497,580
2,000,000 5.00 01/15/2004 1,855,940
200,000 5.75 04/15/2008 181,282
Federal National Mortgage Association
1,000,000 9.20 09/11/2000 1,008,910
3,500,000 5.72 01/09/2001 3,476,480
250,000 6.18 03/15/2001 248,867
500,000 6.63 04/18/2001 499,610
700,000 6.38 08/14/2001 693,658
500,000 7.50 02/11/2002 502,810
10,000,000 5.25 01/15/2003 9,534,400
13,300,000 5.75 04/15/2003 12,803,378
330,000 6.05 05/29/2003 318,193
625,000 7.40 07/01/2004 622,069
750,000 6.50 08/15/2004 729,255
215,000 7.88 02/24/2005 220,308
500,000 7.65 03/10/2005 507,890
Student Loan Marketing Association
180,000 6.05 09/14/2000 179,635
Tennessee Valley Authority 1989 Series D
575,000 6.00 11/01/2000 573,833
U.S. Department of Housing & Urban Development Section 108 Series 1995-A
1,250,000 8.15 08/01/2000 1,254,087
-----------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(cost $63,709,149) $ 62,167,440
-----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
COMMERCE SHORT-TERM GOVERNMENT FUND
Statement of Investments (continued)
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
U.S. Treasury Obligation - 0.5%
United States Treasury Note
$ 500,000 5.75% 08/15/2003 $ 487,345
-----------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATION
(cost $510,859) $ 487,345
-----------------------------------------------------------------------------------------------
Repurchase Agreement - 0.2%
State Street Bank & Trust Co.
$ 245,000 5.55% 05/01/2000 $ 245,000
-----------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(cost $245,000) $ 245,000
-----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $102,805,173) $100,185,203
-----------------------------------------------------------------------------------------------
</TABLE>
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
------------------------------------------------------------------------------
Investment Abbreviations:
PAC --Planned Amortization Class
REMIC --Real Estate Mortgage Investment Conduit
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
COMMERCE BOND FUND
Bond Fund Overview
Dear Shareholder:
We are pleased to report on the performance of the Commerce Bond Fund (the
"Fund") for the six-month period ended April 30, 2000.
Performance Review
.For the six-month period ended April 30, 2000, the Insti-
tutional Shares of the Fund had a cumulative total return
of 0.74%, based on Net Asset Value (NAV). The Service
Shares had a cumulative total return, without sales
charge, of 0.62% for the same period based on NAV. This
compares to the Lipper Intermediate Investment Grade Debt
Funds Index six-month cumulative return of 0.99% and the
Lehman Brothers Aggregate Bond Index six-month cumulative
return of 1.42%. Past performance is no guarantee of fu-
ture results. (The Fund's NAV and yield are not guaranteed
by the FDIC or the U.S. Government or by its agencies, in-
strumentalities, or sponsored enterprises.)
Portfolio Highlights
.In general, it has been a difficult period for the bond
market. Corporate, mortgage, and asset-backed securities
yields have increased dramatically during 2000, largely in
response to the robust economy and fears of rising infla-
tion. For example, auto sales have been running at a
faster pace than 1999 and consumer spending has accelerat-
ed.
.Against this backdrop, the Federal Reserve has raised
overnight interest rates three times over the last six
months, pushing Fed Funds from 5.50% to 6.50%. The 30-year
mortgage rates have jumped over the same period from 8.00%
to 8.40%. This has resulted in a modest return for the
Fund of 0.74% over this six-month period as the fixed-in-
come markets' decline offset the majority of its coupon
income.
.The Fund modestly underperformed its Lipper peer group
over the most recent six months, largely due to its
slightly longer maturity and its investment focus on high-
er-yielding, spread-oriented securities. Interest rate
differentials between A-rated corporate bonds and similar
maturity U.S. Treasuries have widened by more than 40 ba-
sis points and are offering extremely attractive value
relative to U.S. Government securities. We feel the port-
folio is well positioned with both a higher yield and
longer interest rate sensitivity relative to its peer
group to add value as interest rates peak sometime over
the second half of the year.
We thank you for your investment and look forward to your
continued confidence.
Sincerely,
Fixed-Income Funds Team
Investment Management Group
Commerce Bank, N.A.
May 26, 2000
7
<PAGE>
COMMERCE BOND FUND
Statement of Investments
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Asset-Backed Securities - 35.3%
Auto - 0.1%
Fifth Third Bank Auto Grantor Trust Series 1996-A, Class A
$ 320,590 6.20% 09/15/2001 $ 320,087
-----------------------------------------------------------------------------------------------
Commercial - 1.7%
Asset Securitization Corp. Series 1997-MD7, Class A2#
1,250,000 7.76 01/13/2030 1,200,937
Commercial Mortgage Asset Trust Series 1999-C1, Class B
2,250,000 7.23 07/17/2013 2,149,722
First Union-Lehman Brothers-Bank of America Series 1998-C2, Class B
2,500,000 6.64 03/18/2011 2,307,731
------------
5,658,390
-----------------------------------------------------------------------------------------------
Credit Card - 12.4%
American Express Credit Account Master Trust Series 1994-3, Class A
2,000,000 7.85 08/15/2005 2,029,360
American Express Credit Account Master Trust Series 1996-1, Class B
2,000,000 6.95 12/15/2003 1,988,740
Chemical Master Credit Card Trust I Series 1995-3, Class A
2,000,000 6.23 04/15/2005 1,951,860
Chemical Master Credit Card Trust I Series 1996-1, Class B
1,000,000 5.71 09/15/2003 987,810
Chemical Master Credit Card Trust I Series 1996-2, Class A
2,500,000 5.98 09/15/2008 2,343,750
Chemical Master Credit Card Trust I Series 1996-2, Class B
2,500,000 6.16 09/15/2008 2,320,300
Citibank Credit Card Master Trust I Series 1997-6, Class B @
2,000,000 6.47 08/15/2006 1,444,375
Citibank Credit Card Master Trust I Series 1999-2, Class B
2,170,000 6.15 03/10/2011 1,946,880
Discover Card Master Trust I Series 1993-3, Class A
2,000,000 6.20 05/16/2006 1,931,240
First USA Credit Card Master Trust Series 1997-6, Class B
2,200,000 6.58 03/17/2005 2,159,542
First USA Credit Card Master Trust Series 1998-2, Class C+
3,000,000 6.80 02/18/2011 2,734,688
First USA Credit Card Master Trust Series 1999-1, Class C+
3,500,000 6.42 10/19/2006 3,321,035
MBNA Master Credit Card Trust Series 1995-C, Class A
2,000,000 6.45 02/15/2008 1,916,240
MBNA Master Credit Card Trust Series 1999-B, Class B
2,000,000 6.20 08/15/2011 1,815,280
MBNA Master Credit Card Trust Series 1999-D, Class C+
2,000,000 6.95 11/17/2008 1,874,375
Metris Master Trust Series 1997-1, Class A
2,500,000 6.87 10/20/2005 2,460,150
Metris Master Trust Series 1997-1, Class B
1,000,000 7.11 10/20/2005 983,430
Standard Credit Card Master Trust Series 1993-2, Class A
3,750,000 5.95 10/07/2004 3,597,851
Standard Credit Card Master Trust Series 1995-1, Class A
2,000,000 8.25 01/07/2007 2,060,184
-----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Asset-Backed Securities - (continued)
Credit Card - (continued)
Standard Credit Card Master Trust Series 1995-1, Class B
$2,000,000 8.45% 01/07/2007 $ 2,065,345
------------
41,932,435
-----------------------------------------------------------------------------------------------
Equipment - 0.1%
Green Tree Recreational, Equipment & Consumer Trust Series 1996-A, Class
A1
285,614 5.55 02/15/2018 275,163
-----------------------------------------------------------------------------------------------
Home Equity - 8.7%
Access Financial Mortgage Loan Trust Series 1996-2, Class A4
1,500,000 7.63 09/18/2021 1,496,655
Advanta Mortgage Loan Trust Series 1994-4, Class A2
2,320,534 8.92 01/25/2026 2,398,445
American Business Financial Services, Inc. Series 1996-1, Class A
2,538,864 7.95 09/15/2026 2,513,872
Contimortgage Home Equity Loan Trust Series 1999-3, Class A6
2,500,000 7.68 12/25/2029 2,376,856
Corestates Home Equity Trust Series 1993-2, Class A
146,969 5.10 03/15/2009 145,496
GE Capital Mortgage Services, Inc. Series 1997-8, Class A11
1,750,000 7.25 10/25/2027 1,605,625
GE Capital Mortgage Services, Inc. Series 1997-HE1, Class B1
1,166,588 7.50 03/25/2007 1,080,891
GE Capital Mortgage Services, Inc. Series 1997-HE1, Class M
1,866,541 7.50 03/25/2027 1,765,996
GE Capital Mortgage Services, Inc. Series 1997-HE4, Class B1 #
3,823,814 7.33 12/25/2028 3,497,595
GE Capital Mortgage Services, Inc. Series 1997-HE4, Class M
1,911,907 7.14 12/25/2028 1,786,925
GE Capital Mortgage Services, Inc. Series 1999-13, Class A12
6,000,000 6.50 07/25/2029 5,465,580
Merrill Lynch Mortgage Investors, Inc. Series 1991-H1, Class M1
2,000,000 7.36 07/15/2011 1,877,500
Merrill Lynch Mortgage Investors, Inc. Series 1999-H1, Class A3
3,500,000 6.76 09/20/2026 3,333,750
------------
29,345,186
-----------------------------------------------------------------------------------------------
Manufactured Housing - 11.9%
Associates Manufactured Housing Pass-Through Series 1996-1, Class A5
5,000,000 7.60 03/15/2027 4,877,850
Green Tree Financial Corp. Series 1993-4, Class A4
1,819,660 6.60 01/15/2019 1,792,165
Green Tree Financial Corp. Series 1993-4, Class A5
4,000,000 7.05 01/15/2019 3,793,120
Green Tree Financial Corp. Series 1994-2, Class A4
3,912,783 7.90 05/15/2019 3,928,982
Green Tree Financial Corp. Series 1995-1, Class B1
1,500,000 9.00 06/15/2025 1,513,935
Green Tree Financial Corp. Series 1995-5, Class B1
1,816,897 7.30 09/15/2026 1,760,900
-----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
COMMERCE BOND FUND
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Asset-Backed Securities - (continued)
Manufactured Housing - (continued)
Green Tree Financial Corp. Series 1995-8, Class B1
$ 300,000 7.30% 12/15/2026 $ 292,500
Green Tree Financial Corp. Series 1996-3, Class A4
1,000,000 7.10 05/15/2027 993,920
Green Tree Financial Corp. Series 1996-4, Class A7
4,000,000 7.90 06/15/2027 3,896,880
Green Tree Financial Corp. Series 1996-8, Class M1
2,000,000 7.85 10/15/2027 1,937,580
Green Tree Financial Corp. Series 1997-3, Class B1
1,500,000 7.51 07/15/2028 1,324,320
Green Tree Financial Corp. Series 1997-3, Class M1
3,250,000 7.53 07/15/2028 3,142,620
Green Tree Financial Corp. Series 1997-6, Class M1
2,500,000 7.21 06/15/2027 2,342,969
Green Tree Financial Corp. Series 1998-3, Class A6
800,000 6.76 03/01/2030 722,744
Green Tree Financial Corp. Series 1999-1, Class M1
1,750,000 6.56 03/01/2020 1,509,375
Green Tree Financial Corp. Series 1999-1, Class M2
750,000 7.34 11/01/2028 662,573
Green Tree Home Improvement Loan Trust Series 1997-E, Class HEM1
2,500,000 7.28 01/15/2029 2,391,675
Indymac Manufactured Housing Contract (Credit Suisse First Boston)
Series 1997-1, Class M
2,000,000 7.11 02/25/2028 1,841,280
Oakwood Mortgage Investors, Inc. Series 1997-A, Class A5
1,500,000 7.13 05/15/2027 1,438,785
--------------
40,164,173
--------------------------------------------------------------------------------------------
Utilities - 0.4%
California Infrastructure PG&E-1 (Pacific Gas and Electric) Series
1997-1, Class A6
1,250,000 6.32 09/25/2005 1,214,475
--------------------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost $123,260,495) $ 118,909,909
--------------------------------------------------------------------------------------------
Collateralized Mortgage Obligations - 11.1%
Asset Securitization Corp. 1995-MD4, Class A1
$ 5,038,545 7.10% 08/13/2029 $ 4,930,216
Asset Securitization Corp. Series 1997-D4, Class A1E
2,500,000 7.53 04/14/2029 2,444,919
Bear Stearns Mortgage Securities, Inc. Series 1998-1, Class A17
1,000,000 5.00 03/25/2028 752,694
Countrywide Mortgage Backed Securities, Inc. REMIC PAC Series 1993-B,
Class A5
1,222,323 6.75 11/25/2023 1,159,288
Federal Home Loan Mortgage Corp. REMIC PAC Series 1579, Class PM
1,235,000 6.70 09/15/2023 1,150,477
Federal Home Loan Mortgage Corp. Series 1652, Class PJ
3,000,000 6.60 08/15/2022 2,909,040
--------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Collateralized Mortgage Obligations - (continued)
Federal National Mortgage Assn. REMIC Series 1992-1, Class E
$1,367,095 7.50% 01/25/2007 $ 1,362,816
Federal National Mortgage Assn. REMIC Series 1993-130, Class H
1,500,000 6.30 09/25/2018 1,484,055
LB Commercial Conduit Mortgage Trust Series 1998-C4, Class A1B
4,500,000 6.21 10/15/2008 4,083,705
Mortgage Capital Funding, Inc. Series 1996-MC1, Class A2A
2,577,369 7.35 07/15/2005 2,560,617
Norwest Asset Securities Corp. Series 1998-21, Class B1
1,210,780 6.50 09/25/2013 1,117,986
PNC Mortgage Securities Corp. REMIC Series 1996-1,
Class A10
1,598,062 7.50 09/25/2009 1,568,594
Prudential Home Mortgage Securities Co. Series 1993-28, Class M
2,321,977 7.38 08/25/2023 2,220,251
Residential Asset Securitization REMIC Trust Series 1997-A1, Class A7
3,000,000 7.38 03/25/2027 2,870,760
Residential Funding Mortgage Securities Corp. Series 1999-S14 Class IIA1
3,413,912 6.50 06/25/2029 3,130,113
Residential Funding Mortgage Securities Corp. Series 1999-S20, Class A1
3,750,630 6.50 09/25/2014 3,554,894
-----------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $39,244,045) $ 37,300,425
-----------------------------------------------------------------------------------------------
Corporate Obligations - 32.5%
Energy - 0.7%
Phillips Petroleum Co.
$3,000,000 7.00% 03/30/2029 $ 2,487,750
-----------------------------------------------------------------------------------------------
Financial - 18.5%
Allstate Corp.
814,000 6.75 05/15/2018 703,133
American Express Credit Corp.
2,000,000 6.13 11/15/2001 1,963,560
Apache Finance Property Ltd.
2,250,000 7.00 03/15/2009 2,087,530
Associates Corp. N.A.
1,900,000 6.95 11/01/2018 1,716,726
Bank of America Corp.
3,500,000 6.88 06/01/2003 3,427,655
Case Corp.
2,500,000 6.25 12/01/2003 2,342,563
Chemical Bank
2,000,000 6.70 08/15/2008 1,863,700
Donaldson Lufkin & Jenrette, Inc.
1,250,000 6.00 12/01/2001 1,215,550
-----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
COMMERCE BOND FUND
Statement of Investments (continued)
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Corporate Obligations - (continued)
Financial - (continued)
EOP Operating LP
$3,200,000 7.25% 02/15/2018 $ 2,717,152
Equitable Life Assurance Society of the United States+
6,000,000 7.70 12/01/2015 5,735,118
Ford Motor Company Credit Corp.
2,000,000 6.63 06/30/2003 1,939,900
General Motors Acceptance Corp.
2,000,000 5.88 01/22/2003 1,910,540
2,000,000 6.63 10/15/2005 1,883,705
Hanson Overseas BV
2,000,000 6.75 09/15/2005 1,877,200
Household Financial Corp.
1,500,000 6.50 11/15/2008 1,352,010
Merrill Lynch & Co., Inc.
1,900,000 5.71 01/15/2002 1,848,339
Metropolitan Life Insurance Co.+
4,000,000 7.70 11/01/2015 3,909,360
Morgan Stanley Group, Inc.
2,000,000 6.75 03/04/2003 1,958,300
National Bank of Canada
3,000,000 7.75 11/01/2009 2,946,450
NationsBank Corp.
1,000,000 7.75 08/15/2015 977,130
1,000,000 7.80 09/15/2016 985,350
Paine Webber Group, Inc.
1,400,000 7.63 10/15/2008 1,335,782
PNC Bank, N.A.
2,000,000 7.88 04/15/2005 2,003,180
Sanwa Finance Aruba AEC
3,500,000 8.35 07/15/2009 3,472,245
Simon Debartolo Group LP
2,000,000 6.75 06/15/2005 1,830,100
Swiss Bank Corp.
4,000,000 7.38 06/15/2017 3,782,800
5,000,000 7.50 07/15/2025 4,641,500
------------
62,426,578
-----------------------------------------------------------------------------------------------
Industrial - 10.7%
Conoco, Inc.
1,500,000 6.35 04/15/2009 1,372,395
2,500,000 6.95 04/15/2029 2,241,475
Ford Motor Co.
5,000,000 6.50 08/01/2018 4,285,150
General Motors Acceptance Corp.
3,250,000 6.15 04/05/2007 2,978,267
Lafarge Corp.
3,500,000 6.88 07/15/2013 3,071,194
Receipts on Corporate Securities Trust CHR-1998-1
4,985,708 6.50 08/01/2018 4,456,994
Receipts on Corporate Securities Trust NSC-1998-1+
4,013,176 6.38 05/15/2017 3,533,525
Ryder System, Inc.
4,000,000 6.60 11/15/2005 3,692,640
-----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Corporate Obligations - (continued)
Industrial - (continued)
Service Master Co.
$3,000,000 7.10% 03/01/2018 $ 2,472,780
St. Paul Companies, Inc.
4,000,000 6.38 12/15/2008 3,609,640
TRW, Inc.
2,500,000 6.05 01/15/2005 2,271,525
Union Oil Co.
1,000,000 7.62 03/21/2002 1,001,090
1,000,000 7.70 04/05/2002 1,002,010
------------
35,988,685
-----------------------------------------------------------------------------------------------
Real Estate - 0.3%
Speiker Properties LP
1,000,000 7.35 12/01/2017 862,640
-----------------------------------------------------------------------------------------------
Utilities - 2.3%
AT&T Corp.
1,500,000 6.50 03/15/2029 1,265,340
GTE Corp.
6,000,000 6.84 04/15/2018 5,389,680
Hydro Quebec
1,000,000 7.96 12/17/2001 1,007,036
------------
7,662,056
-----------------------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(Cost $118,721,131) $109,427,709
-----------------------------------------------------------------------------------------------
Mortgage-Backed Pass-Through Obligations - 15.8%
Federal Home Loan Mortgage Corporation (FHLMC)
$1,297,233 6.00% 12/01/2013 $ 1,197,580
958,137 8.50 02/01/2019 975,604
1,018,920 8.50 03/01/2021 1,036,964
7,999,605 7.00 05/01/2026 7,689,620
Federal National Mortgage Association (FNMA)
2,803,930 5.50 01/01/2009 2,636,059
1,859,511 7.00 07/01/2009 1,817,672
512,678 6.50 02/01/2012 495,842
1,285,970 6.00 12/01/2013 1,206,394
1,041,282 6.50 07/01/2014 986,063
794,634 9.00 11/01/2021 815,977
1,038,138 6.50 04/01/2024 977,147
955,424 6.00 05/01/2024 873,018
1,020,967 6.50 05/01/2024 960,352
997,051 6.50 07/01/2024 937,856
1,212,823 6.50 07/01/2024 1,140,817
685,171 6.00 09/01/2024 626,075
1,551,992 6.50 09/01/2024 1,459,850
376,027 9.00 02/01/2025 386,131
2,362,680 6.50 03/01/2026 2,217,966
1,765,183 8.00 07/01/2028 1,770,691
1,346,786 7.00 08/01/2028 1,289,966
1,184,232 7.00 09/01/2028 1,133,156
1,842,584 7.00 10/01/2028 1,763,113
-----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
COMMERCE BOND FUND
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Mortgage-Backed Pass-Through Obligations - (continued)
Federal National Mortgage Association (FNMA) - (continued)
$3,647,605 5.82% 12/01/2028 $ 3,493,165
3,778,058 6.50 12/01/2028 3,528,971
1,060,067 7.00 12/01/2028 1,014,346
2,321,798 6.50 01/01/2029 2,168,722
Government National Mortgage Association (GNMA)
2,277,661 8.00 02/15/2022 2,289,756
987,940 7.50 08/20/2025 969,110
5,424,403 7.50 07/20/2026 5,319,332
-----------------------------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED PASS-THROUGH OBLIGATIONS
(Cost $54,644,864) $ 53,177,315
-----------------------------------------------------------------------------------------------
U.S. Government Agency Obligations - 3.1%
Federal National Mortgage Association
$8,000,000 5.75% 04/15/2003 $ 7,701,280
3,000,000 6.38 06/15/2009 2,813,910
-----------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $10,898,357) $ 10,515,190
-----------------------------------------------------------------------------------------------
U.S. Treasury Obligation - 1.4%
United States Treasury Bond
$4,000,000 7.88% 02/15/2021 $ 4,731,880
-----------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $4,742,500) $ 4,731,880
-----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Repurchase Agreement - 0.6%
State Street Bank & Trust Co.
$1,986,000 5.55% 05/01/2000 $ 1,986,000
-----------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,986,000) $ 1,986,000
-----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $353,497,392) $336,048,428
-----------------------------------------------------------------------------------------------
</TABLE>
# Variable rate security. Coupon rate disclosed is that which is in effect at
April 30, 2000.
@ This security is issued with a zero-coupon. The interest rate disclosed for
this security represents effective yield to maturity.
+ Securities that may be resold to "Qualified Institutional Buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under guidelines established by the Board of Trustees.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
------------------------------------------------------------------------------
Investment Abbreviations:
PAC--Planned Amortization Class
REMIC--Real Estate Mortgage Investment Conduit
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
COMMERCE BALANCED FUND
Balanced Fund Overview
Dear Shareholder,
We are pleased to report on the performance of the Commerce Balanced Fund
(the "Fund") for the six-month period ended April 30, 2000.
Performance Review
.For the six-month period ended April 30, 2000, the Insti-
tutional Shares of the Fund had a cumulative total return
of 8.12%, based on Net Asset Value (NAV) (assumes fee
waivers and expense reimbursements). The Service Shares
had a cumulative total return, without sales charge, of
8.00% for the same period based on NAV (assumes fee waiv-
ers and expense reimbursements). This compares to the
Lipper Balanced Funds Index six-month cumulative return of
5.22%, the composite of 60% of the Standard and Poor's 500
Index with Income and 40% of the Lehman Brothers Aggregate
Bond Index six-month cumulative return of 5.03%, the S&P
500 Index with Income six-month cumulative return of 7.20%
and the Lehman Brothers Aggregate Bond Index six-month cu-
mulative return of 1.42%. Past performance is no guarantee
of future results. (The Fund's NAV is not guaranteed by
the FDIC or the U.S. Government or by its agencies, in-
strumentalities, or sponsored enterprises.)
Portfolio Highlights
.In November, we raised the equity weighting of the Fund
back up to its long-term target of 60%, as we became in-
creasingly optimistic for the outlook of equities. The eq-
uity averages surged in November and December. Gains
continued until mid-March, when valuation concerns com-
bined with rising interest rates cooled investor enthusi-
asm.
.The equity portion of the Fund uses a blend of large cap
growth and value companies. The large cap companies are
complemented with mid cap growth issues as well. The com-
bination of these different styles leads to a well-diver-
sified portfolio. All three styles positively contributed
to the equity results over the last six months.
.The remaining 40%, invested in bonds has had a difficult
six months. Corporate, mortgage, and asset-backed securi-
ties yields have increased dramatically, largely in
response to a robust economy and fears of rising infla-
tion. The Federal Reserve has raised overnight interest
rates three times over the six months, pushing Fed Funds
from 5.50% to 6.50%. The 30-year mortgage rates have
jumped over the same period from 8.00% to 8.40%. The in-
creased interest rates have resulted in the bond portion
of the portfolio contributing less than 0.50% of the total
return of the Fund.
We thank you for your investment and look forward to your
continued confidence.
Sincerely,
Balanced Fund Team
Investment Management Group
Commerce Bank, N.A.
May 26, 2000
12
<PAGE>
COMMERCE BALANCED FUND
Statement of Investments
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 59.6%
Commercial Services - 1.9%
15,000 Dendrite International, Inc. * $ 343,125
9,000 Maximus, Inc. * 212,063
9,600 Omnicom Group, Inc. 874,200
7,100 Paychex, Inc. 373,637
6,000 WPP Group PLC ADR 464,250
------------
2,267,275
------------------------------------------------------------
Consumer Durables - 3.3%
34,450 D.R. Horton, Inc. 445,697
3,000 Electronic Arts, Inc. * 181,500
19,500 Ethan Allen Interiors, Inc. 520,406
28,500 Ford Motor Co. 1,558,594
3,000 JAKKS Pacific, Inc. * 55,125
34,000 Leggett & Platt, Inc. 726,750
12,000 Maytag Corp. 413,250
------------
3,901,322
------------------------------------------------------------
Consumer Non-Durables - 0.8%
4,500 Anheuser-Busch Cos., Inc. 317,531
10,000 Jones Apparel Group, Inc. * 296,875
8,000 The Clorox Co. 294,000
------------
908,406
------------------------------------------------------------
Consumer Services - 0.9%
8,000 Cox Communications, Inc. * 342,500
6,500 The Walt Disney Co. 281,531
22,000 USA Networks, Inc. * 506,000
------------
1,130,031
------------------------------------------------------------
Electronic Technology - 19.0%
7,400 ADC Telecommunications, Inc. * 449,550
14,100 Altera Corp. * 1,441,725
4,000 Analog Devices, Inc. * 307,250
6,000 ANTEC Corp. * 322,500
4,400 Applied Materials, Inc. * 447,975
5,000 Black Box Corp. * 384,688
17,600 Cisco Systems, Inc. * 1,220,175
7,000 Comverse Technology, Inc. * 624,312
19,500 Electronics for Imaging, Inc. * 1,018,875
7,800 EMC Corp. * 1,083,712
17,000 General Dynamics Corp. 994,500
9,700 Intel Corp. 1,230,081
19,600 International Business Machines Corp. 2,187,850
14,600 Jabil Circuit, Inc. * 597,687
7,000 Kulicke and Soffa Industries, Inc. * 548,188
11,000 Linear Technology Corp. 628,375
8,000 Litton Industries, Inc. * 347,500
14,000 LSI Logic Corp. * 875,000
9,750 Microchip Technology, Inc. * 605,109
3,500 Motorola, Inc. 416,719
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Electronic Technology - (continued)
8,000 MTI Technology Corp. * $ 124,000
16,400 Nokia OYJ ADR 932,750
12,000 PerkinElmer, Inc. 657,000
2,000 QLogic Corp. * 200,625
3,000 Rainbow Technologies, Inc. * 96,188
8,000 Sanmina Corp. * 480,500
11,000 SCI Systems, Inc. * 585,750
7,000 Scientific-Atlanta, Inc. 455,438
8,600 Sun Microsystems, Inc. * 790,662
17,400 Symbol Technologies, Inc. 970,050
10,400 Tellabs, Inc. * 570,050
1,900 Teradyne, Inc. * 209,000
7,300 United Technologies Corp. 453,969
6,000 Vitesse Semiconductor Corp. * 408,375
------------
22,666,128
---------------------------------------------------------
Energy Minerals - 3.2%
6,000 Apache Corp. 303,285
6,000 Chevron Corp. 510,750
15,000 Conoco, Inc. 357,188
18,000 Exxon Mobil Corp. 1,398,375
12,300 Royal Dutch Petroleum Co. ADR 705,712
20,000 Ultramar Diamond Shamrock Corp. 495,000
------------
3,770,310
---------------------------------------------------------
Finance - 5.7%
18,000 Ace Ltd. 430,875
14,000 Ambac Financial Group, Inc. 672,000
5,500 American International Group, Inc. 603,281
9,000 Bank of America Corp. 441,000
14,000 Citigroup, Inc. 832,125
8,000 Comerica, Inc. 339,000
10,000 Lincoln National Corp. 348,125
19,000 Morgan Stanley Dean Witter & Co. 1,458,250
7,800 Northern Trust Corp. 500,175
10,000 The Bank of New York Co., Inc. 410,625
6,000 The Chase Manhattan Corp. 432,375
9,000 Wells Fargo & Co. 369,563
------------
6,837,394
---------------------------------------------------------
Health Services - 1.2%
11,700 Cardinal Health, Inc. 644,231
25,400 Lincare Holdings, Inc. * 774,700
------------
1,418,931
---------------------------------------------------------
Health Technology - 3.2%
4,000 Allergan, Inc. 235,500
5,800 Amgen, Inc. * 324,800
3,000 ArthroCare Corp. * 305,625
4,000 Biogen, Inc. * 235,250
---------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
COMMERCE BALANCED FUND
Statement of Investments (continued)
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Health Technology - (continued)
9,000 Johnson & Johnson $ 742,500
14,700 Medtronic, Inc. 763,481
20,000 Schering-Plough Corp. 806,250
5,000 Techne Corp. * 355,625
-----------
3,769,031
--------------------------------------------------------------
Industrial Services - 1.9%
30,000 Helmerich & Payne, Inc. 939,375
5,000 Nabors Industries, Inc. * 197,188
25,000 Transocean Sedco Forex, Inc. 1,175,000
-----------
2,311,563
--------------------------------------------------------------
Non-Energy Minerals - 0.5%
25,000 USX-U.S. Steel Group, Inc. 626,563
--------------------------------------------------------------
Process Industries - 3.7%
15,000 Air Products & Chemicals, Inc. 465,938
4,000 Amdocs Ltd. * 270,750
15,000 Boise Cascade Corp. 488,437
10,000 General Electric Co. 1,572,500
13,000 International Paper Co. 477,750
9,520 Pharmacia Corp. 475,405
900 The Internet HOLDRs Trust * 115,875
15,000 Willamette Industries, Inc. 572,812
-----------
4,439,467
--------------------------------------------------------------
Producer Manufacturing - 2.4%
10,700 Danaher Corp. 611,237
5,000 Dover Corp. 254,063
14,000 Herman Miller, Inc. 383,250
10,000 Illinois Tool Works, Inc. 640,625
12,000 Ingersoll-Rand Co. 563,250
5,000 Polycom, Inc. * 395,625
-----------
2,848,050
--------------------------------------------------------------
Retail Trade - 3.9%
8,000 Best Buy Co., Inc. * 646,000
10,000 Circuit City Stores-Circuit City Group 588,125
7,318 CVS Corp. 318,333
14,500 Lowe's Cos., Inc. 717,750
8,000 Tandy Corp. 456,000
9,400 Target Corp. 625,687
22,000 The TJX Cos., Inc. 422,125
10,300 Wal-Mart Stores, Inc. 570,363
7,000 Zale Corp. * 288,750
-----------
4,633,133
--------------------------------------------------------------
Technology Services - 3.9%
1,000 Adobe Systems, Inc. 120,938
10,300 BMC Software, Inc. * 482,169
2,000 Check Point Software Technologies Ltd. * 346,000
12,000 First Data Corp. 584,250
10,000 Jack Henry & Associates, Inc. 395,000
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Technology Services - (continued)
9,400 Microsoft Corp. * $ 655,650
15,000 Oracle Corp. * 1,199,062
10,000 QRS Corp. * 330,000
6,000 Rational Software Corp. * 510,750
-----------
4,623,819
----------------------------------------------------
Transportation - 0.7%
36,450 Southwest Airlines Co. 790,509
----------------------------------------------------
Utilities - 3.4%
14,000 AT&T Corp. 653,625
8,500 Consolidated Edison, Inc. 299,094
14,000 Duke Energy Corp. 805,000
10,000 Equitable Resources, Inc. 463,750
8,000 GTE Corp. 542,000
2,000 Nextel Communications, Inc. * 218,875
12,000 SBC Communications, Inc. 525,750
8,000 Sprint Corp. 492,000
2,000 United States Cellular Corp. * 120,125
-----------
4,120,219
----------------------------------------------------
TOTAL COMMON STOCKS
(Cost $54,470,787) $71,062,151
----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Fixed Income - 37.6%
Asset-Backed Securities - 14.9%
Commercial - 1.2%
Commercial Mortgage Asset Trust Series 1999-C1, Class B
$500,000 7.23% 07/17/2013 $ 477,716
First Union-Lehman Brothers-Bank of America Series 1998-C2, Class B
500,000 6.64 03/18/2011 461,546
LB Commercial Conduit Mortgage Trust Series 1999-C1, Class A1
482,839 6.41 08/15/2007 459,954
----------
1,399,216
--------------------------------------------------------------------------------------------------
Credit Card - 3.5%
American Express Credit Account Master Trust Series 1994-3, Class A
500,000 7.85 08/15/2005 507,340
American Express Credit Account Master Trust Series 1996-1, Class B
500,000 6.95 12/15/2003 497,185
Citibank Credit Card Master Trust I Series 1999-2, Class B
750,000 6.15 03/10/2011 672,885
First USA Credit Card Master Trust Series 1998-2, Class C+
500,000 6.80 02/18/2011 455,781
First USA Credit Card Master Trust Series 1999-1, Class C+
500,000 6.42 10/19/2006 474,434
--------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
COMMERCE BALANCED FUND
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Asset-Backed Securities - (continued)
Credit Card - (continued)
J.C. Penney Master Credit Card Trust Series B, Class A
$ 53,517 8.95% 10/15/2001 $ 54,469
MBNA Master Credit Card Trust Series 1999-D, Class C+
500,000 6.95 11/17/2008 468,594
Metris Master Trust Series 1997-1, Class B
500,000 7.11 10/20/2005 491,715
Standard Credit Card Master Trust Series 1995-1, Class B
500,000 8.45 01/07/2007 516,336
----------
4,138,739
--------------------------------------------------------------------------------------------------
Home Equity - 4.3%
Access Financial Mortgage Loan Trust Series 1996-2, Class A4
500,000 7.63 09/18/2021 498,885
Advanta Mortgage Loan Trust Series 1994-4, Class A2
290,067 8.92 01/25/2026 299,806
American Business Financial Services, Inc. Series 1996-1, Class A
253,887 7.95 09/15/2026 251,387
Contimortgage Home Equity Loan Trust Series 1999-3, Class A6
700,000 7.68 12/25/2029 665,519
Corestates Home Equity Trust Series 1993-2, Class A
146,969 5.10 03/15/2009 145,496
First Plus Home Loan Trust Series 1997-3, Class A5
500,000 6.86 10/10/2013 498,745
GE Capital Mortgage Services, Inc. Series 1997-HE1, Class B1
466,635 7.50 03/25/2007 432,356
GE Capital Mortgage Services, Inc. Series 1997-HE1, Class M
466,635 7.50 03/25/2027 441,499
GE Capital Mortgage Services, Inc. Series 1997-HE4, Class M
477,977 7.14 12/25/2028 446,732
Merrill Lynch Mortgage Investors, Inc. Series 1999-H1, Class A3
1,500,000 6.76 09/20/2026 1,428,750
----------
5,109,175
--------------------------------------------------------------------------------------------------
Manufactured Housing - 5.9%
Associates Manufactured Housing Pass-Through Series 1996-1, Class A5
500,000 7.60 03/15/2027 487,785
Green Tree Financial Corp. Series 1993-4, Class A4
454,915 6.60 01/15/2019 448,041
Green Tree Financial Corp. Series 1993-4, Class A5
500,000 7.05 01/15/2019 474,140
Green Tree Financial Corp. Series 1994-2, Class A4
489,098 7.90 05/15/2019 491,123
Green Tree Financial Corp. Series 1996-3, Class A4
1,000,000 7.10 05/15/2027 993,920
Green Tree Financial Corp. Series 1996-4, Class A7
500,000 7.90 06/15/2027 487,110
Green Tree Financial Corp. Series 1996-5, Class A6
1,000,000 7.75 07/15/2027 995,090
--------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Asset-Backed Securities - (continued)
Manufactured Housing - (continued)
Green Tree Financial Corp. Series 1997-3, Class M1
$1,000,000 7.53% 07/15/2028 $ 966,960
Green Tree Financial Corp. Series 1999-1, Class M1
250,000 6.56 03/01/2020 215,625
Green Tree Home Improvement Loan Trust Series 1997-E, Class HEM1
500,000 7.28 01/15/2029 478,335
Oakwood Mortgage Investors, Inc. Series 1995-B, Class A3
600,000 6.90 01/15/2021 571,662
Oakwood Mortgage Investors, Inc. Series 1997-A, Class A5
500,000 7.13 05/15/2027 479,595
-----------
7,089,386
-----------------------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(cost $18,456,368) $17,736,516
-----------------------------------------------------------------------------------------------
Collateralized Mortgage Obligations - 4.4%
Asset Securitization Corp. 1995-MD4, Class A1
$ 462,337 7.10% 08/13/2029 $ 452,396
Federal Home Loan Mortgage Corp. REMIC PAC Series 159, Class H
835,846 4.50 09/15/2021 768,935
Federal National Mortgage Assn. REMIC Series 1993-225, Class NB
230,467 6.50 12/25/2022 223,912
Federal National Mortgage Association Series 1996-68, Class VC
1,500,000 6.50 09/18/2010 1,392,180
Mortgage Capital Funding, Inc. Series 1996-MC1, Class A2A
322,171 7.35 07/15/2005 320,077
Prudential Home Mortgage Securities Co. Series 1993-28, Class M
386,996 7.38 08/25/2023 370,042
Residential Asset Securitization REMIC Trust Series 1997-A1, Class A7
500,000 7.38 03/25/2027 478,460
Residential Asset Securitization REMIC Trust Series 1997-A5, Class A13
500,000 7.75 07/25/2027 496,770
Residential Funding Mortgage Securities Corp. Series 1995-S4, Class A4
328,862 8.00 04/25/2010 327,629
Residential Funding Mortgage Securities Corp. Series 1999-S20, Class A1
468,829 6.50 09/25/2014 444,362
-----------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(cost $5,484,537) $ 5,274,763
-----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
COMMERCE BALANCED FUND
Statement of Investments (continued)
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Corporate Obligations - 12.2%
Energy - 0.4%
Phillips Petroleum Co.
$ 500,000 7.00% 03/30/2029 $ 414,625
-----------------------------------------------------------------------------------------------
Financial - 6.9%
Apache Finance Property Ltd.
500,000 7.00% 03/15/2009 463,896
Chemical Bank
500,000 6.70 08/15/2008 465,925
EOP Operating LP
500,000 7.25 02/15/2018 424,555
Equitable Life Assurance Society of the United States+
1,000,000 7.70 12/01/2015 955,853
Ford Motor Company Credit Corp.
500,000 6.63 06/30/2003 484,975
Hanson Overseas BV
500,000 6.75 09/15/2005 469,300
Lehman Brothers Holdings, Inc.
750,000 6.63 04/01/2004 716,955
Merrill Lynch & Co., Inc.
500,000 5.71 01/15/2002 486,405
Metropolitan Life Insurance Co.+
1,000,000 7.70 11/01/2015 977,340
Morgan Stanley Group, Inc.
500,000 6.75 03/04/2003 489,575
NationsBank Corp.
500,000 7.80 09/15/2016 492,675
PNC Bank, N.A.
500,000 7.88 04/15/2005 500,795
Sanwa Finance Aruba AEC
250,000 8.35 07/15/2009 248,018
Simon Debartolo Group LP
500,000 6.75 06/15/2005 457,525
Swiss Bank Corp.
645,000 7.38 06/15/2017 609,976
------------
8,243,768
-----------------------------------------------------------------------------------------------
Industrial - 3.6%
Conoco, Inc.
500,000 6.35 04/15/2009 457,465
500,000 6.95 04/15/2029 448,295
Lafarge Corp.
500,000 6.88 07/15/2013 438,742
Receipts on Corporate Securities Trust CHR-1998-1
712,244 6.50 08/01/2018 636,713
Receipts on Corporate Securities Trust NSC-1998-1+
1,135,715 6.38 05/15/2017 999,975
Service Master Co.
500,000 7.10 03/01/2018 412,130
St. Paul Companies, Inc.
1,000,000 6.38 12/15/2008 902,410
------------
4,295,730
-----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Corporate Obligations - (continued)
Utilities - 1.3%
AT&T Corp.
$ 500,000 7.13% 01/15/2002 $ 498,230
200,000 6.00 03/15/2009 177,466
500,000 6.50 03/15/2029 421,780
GTE Corp.
500,000 6.84 04/15/2018 449,140
--------------
1,546,616
--------------------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(cost $15,645,444) $ 14,500,739
--------------------------------------------------------------------------------------------
Mortgage-Backed Pass-Through Obligations - 6.1%
Federal Home Loan Mortgage Corporation (FHLMC)
$ 518,893 6.00% 12/01/2013 $ 479,032
Federal National Mortgage Association (FNMA)
743,804 7.00 07/01/2009 727,069
256,339 6.50 02/01/2012 247,921
514,388 6.00 12/01/2013 482,558
891,608 6.50 03/01/2024 839,226
805,389 6.50 04/01/2024 758,072
940,845 6.50 04/01/2024 885,570
927,547 6.50 11/01/2028 866,394
863,338 5.82 12/01/2028 826,784
Government National Mortgage Association (GNMA)
395,176 7.50 08/20/2025 387,644
834,524 7.50 07/20/2026 818,359
--------------------------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED PASS-THROUGH OBLIGATIONS
(cost $7,605,589) $ 7,318,629
--------------------------------------------------------------------------------------------
TOTAL FIXED INCOME
(cost $47,191,938) $ 44,830,647
--------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
COMMERCE BALANCED FUND
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Repurchase Agreement - 1.5%
State Street Bank & Trust Co.
$1,765,000 5.55% 05/01/2000 $ 1,765,000
--------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(cost $1,765,000) $ 1,765,000
--------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $103,427,725) $ 117,657,798
--------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
+ Securities that may be resold to "Qualified Institutional Buyers" under
Rule 144A or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under guidelines established by the board of Trustees.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
------------------------------------------------------------------------------
Investment Abbreviations:
ADR--American Depositary Receipt
PAC--Planned Amortization Class
REMIC--Real Estate Mortgage Investment Conduit
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
COMMERCE GROWTH AND INCOME FUND
Growth and Income Fund Overview
Dear Shareholder,
We are pleased to report on the performance of the Commerce Growth and Income
Fund (the "Fund") for the six-month period ended April 30, 2000.
Performance Review
.For the six-month period ended April 30, 2000, the Insti-
tutional Shares of the Fund had a cumulative total return
of 7.22%, based on Net Asset Value (NAV). The Service
Shares had a cumulative total return, without sales
charge, of 7.08% for the same period based on NAV. This
compares to the Lipper Multi-Cap Value Index six-month cu-
mulative return of 2.29%, the Russell 1000 Value Index
six-month cumulative return of -0.99% and the Standard &
Poor's 500 Index with Income six-month cumulative return
of 7.20%. Past performance is no guarantee of future re-
sults. (The Fund's NAV is not guaranteed by the FDIC or
the U.S. Government or by its agencies, instrumentalities,
or sponsored enterprises.)
Portfolio Highlights
.The Federal Reserve's relentless pursuit to control infla-
tion is beginning to have an adverse effect on growth
stocks supporting high price-to-earnings ratios. The nar-
row market we experienced in the last several quarters is
reversing and broadening out as investor sentiment is be-
ginning to waiver. As the last few months have revealed,
money is flowing into the value stocks due to a combina-
tion of strong earnings growth coupled with below average
prices.
.The Fund's results relative to the Russell 1000 Value In-
dex improved dramatically over the past six months, having
outpaced the index by roughly 8.07%. This out-performance
was partially attributable to the enhancements implemented
in our stock selection process over the past year. Key
changes include the addition of larger capitalization com-
panies as well as focusing on companies experiencing an
event that draws investor attention to the underlying
value of the company.
.Within the Fund, the decision to overweight the energy and
technology sectors relative to the Russell 1000 Value In-
dex was beneficial. Oil and natural gas prices have no-
ticeably rebounded from the depressed levels hit within
the last two years and should begin to stabilize at levels
which will maintain above average profitability for this
industry. Our focus has been on the large integrated oil
companies along with specialty drillers and oilfield serv-
ice providers. In the technology sector, the decision to
trim positions as new highs were being reached in March
proved to be a winning strategy as this industry has re-
versed its fortunes and is under heavy selling pressure.
.Looking ahead, we envision solid, yet slowing, U.S. eco-
nomic growth as the Federal Reserve's interest rate hikes
begin to take effect. Companies relying primarily on com-
modity inflation are being trimmed and replaced with those
experiencing rising revenues through volume increases. The
Fund's underweight position in the financial sector has
been beneficial, as this sector has under-performed for
the past two years. We are now adding to this sector as we
take advantage of the value created by this situation.
We thank you for your investment and look forward to your
continued confidence.
Sincerely,
Growth and Income Fund Team
Investment Management Group
Commerce Bank, N.A.
May 26, 2000
18
<PAGE>
COMMERCE GROWTH AND INCOME FUND
Statement of Investments
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 96.4%
Consumer Durables - 3.0%
25,000 Ford Motor Co. $ 1,367,187
9,000 General Motors Corp. 842,625
-----------
2,209,812
-------------------------------------------------------------
Consumer Non-Durables - 1.4%
15,000 Anheuser-Busch Cos., Inc. 1,058,438
-------------------------------------------------------------
Consumer Services - 2.2%
18,000 Cox Communications, Inc. * 770,625
20,000 The Walt Disney Co. 866,250
-----------
1,636,875
-------------------------------------------------------------
Electronic Technology - 12.7%
42,000 General Dynamics Corp. 2,457,000
17,000 International Business Machines Corp. 1,897,625
18,000 Kulicke and Soffa Industries, Inc. * 1,409,625
25,000 Litton Industries, Inc. * 1,085,937
12,000 Motorola, Inc. 1,428,750
18,500 PerkinElmer, Inc. 1,012,875
-----------
9,291,812
-------------------------------------------------------------
Energy Minerals - 10.9%
15,000 Chevron Corp. 1,276,875
51,000 Conoco, Inc. 1,214,438
41,000 Devon Energy Corp. 1,975,687
28,000 Exxon Mobil Corp. 2,175,250
53,000 Ultramar Diamond Shamrock Corp. 1,311,750
-----------
7,954,000
-------------------------------------------------------------
Finance - 26.6%
60,000 Ace Ltd. 1,436,250
40,500 Ambac Financial Group, Inc. 1,944,000
14,000 American International Group, Inc. 1,535,625
26,987 Bank of America Corp. 1,322,363
42,400 Citigroup, Inc. 2,520,150
25,000 Comerica, Inc. 1,059,375
33,000 FleetBoston Financial Corp. 1,169,438
40,000 Lincoln National Corp. 1,392,500
17,550 Morgan Stanley Dean Witter & Co. 1,346,962
34,000 The Bank of New York Co., Inc. 1,396,125
30,000 The Bear Stearns Co., Inc. 1,286,250
17,800 The Chase Manhattan Corp. 1,282,713
41,800 Wells Fargo & Co. 1,716,412
-----------
19,408,163
-------------------------------------------------------------
Industrial Services - 5.2%
60,000 Helmerich & Payne, Inc. 1,878,750
40,500 Transocean Sedco Forex, Inc. 1,903,500
-----------
3,782,250
-------------------------------------------------------------
Non-Energy Minerals - 1.9%
54,000 USX-U.S. Steel Group, Inc. 1,353,375
-------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Process Industries - 9.4%
54,700 Air Products & Chemicals, Inc. $ 1,699,119
42,000 Boise Cascade Corp. 1,367,625
34,000 International Paper Co. 1,249,500
23,800 Pharmacia Corp. 1,188,513
35,000 Willamette Industries, Inc. 1,336,562
-----------
6,841,319
----------------------------------------------------
Producer Manufacturing - 3.6%
22,000 Dover Corp. 1,117,875
32,000 Ingersoll-Rand Co. 1,502,000
-----------
2,619,875
----------------------------------------------------
Retail Trade - 1.4%
24,000 Zale Corp. * 990,000
----------------------------------------------------
Technology Services - 1.9%
28,500 First Data Corp. 1,387,594
----------------------------------------------------
Utilities - 16.2%
38,500 AT&T Corp. 1,797,469
30,000 CenturyTel, Inc. 735,000
28,700 Consolidated Edison, Inc. 1,009,881
40,000 Duke Energy Corp. 2,300,000
35,000 Equitable Resources, Inc. 1,623,125
22,500 GTE Corp. 1,524,375
30,000 SBC Communications, Inc. 1,314,375
25,000 Sprint Corp. 1,537,500
-----------
11,841,725
----------------------------------------------------
TOTAL COMMON STOCKS
(Cost $66,817,909) $70,375,238
----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Repurchase Agreement - 4.1%
State Street Bank & Trust Co.
$3,018,000 5.55% 05/01/2000 $ 3,018,000
----------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $3,018,000) $ 3,018,000
----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $69,835,909) $73,393,238
----------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
COMMERCE GROWTH FUND
Growth Fund Overview
Dear Shareholder,
We are pleased to report on the performance of the Commerce Growth Fund (the
"Fund") for the six-month period ended April 30, 2000.
Performance Review
.For the six-month period ended April 30, 2000, the Insti-
tutional Shares of the Fund had a cumulative total return
of 16.29%, based on Net Asset Value (NAV). The Service
Shares had a cumulative total return, without sales
charge, of 16.11% for the same period based on NAV. This
compares to the Lipper Multi-Cap Core Index six-month cu-
mulative return of 14.64% and the Standard & Poor's 500
Index with Income six-month cumulative return of 7.20%.
Past performance is no guarantee of future results. (The
Fund's NAV is not guaranteed by the FDIC or the U.S. Gov-
ernment or by its agencies, instrumentalities, or spon-
sored enterprises.)
Portfolio Highlights
.The Fund posted strong returns for the last six months,
relative to its benchmark. The majority of the gains oc-
curred in November and December. Gains continued until
mid-March, when valuation concerns combined with rising
interest rates cooled investor enthusiasm.
.Technology issues led the surge early in the period. The
Fund nearly doubled its weighting in technology from 22%
to over 40%. As we increased our technology exposure, we
focused on the dominant companies in the semiconductor and
telecommunication equipment industries. We also increased
many of our positions in seasoned companies who offer
leading products in building the infrastructure of the
Internet. We did not participate in the hot new issue mar-
ket of Internet-related companies early in the period,
which hindered our results; however, many of these company
stock prices have since plunged from their highs of last
December.
.The assets utilized to increase the weighting in technol-
ogy came from three sectors. We reduced our exposure to
consumer cyclical stocks (retailers, autos, housing, etc.)
because of our concern with the Federal Reserve's resolve
to increase interest rates high enough to slow down the
economy. In the face of rising interest rates and a poten-
tial profit margin squeeze later this year, we continued
to reduce our exposure to financial stocks. We also re-
duced our exposure to health care issues. The political
risks seem to be intensifying for some form of drug price
controls as we move closer to the elections.
.Looking ahead, we believe the Fund is well-positioned to
provide the potential for strong, long-term results. The
Fund's portfolio is currently well-diversified in a group
of companies whose earnings are growing far in excess of
the Standard & Poor's 500 Index average.
We thank you for your investment and look forward to your
continued confidence.
Sincerely,
Growth Fund Team
Investment Management Group
Commerce Bank, N.A.
May 26, 2000
20
<PAGE>
COMMERCE GROWTH FUND
Statement of Investments
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 99.8%
Commercial Services - 2.4%
132,000 Omnicom Group, Inc. $ 12,020,250
--------------------------------------------------------------
Consumer Durables - 7.8%
455,800 D.R. Horton, Inc. 5,896,912
294,900 Ethan Allen Interiors, Inc. 7,870,144
142,600 Ford Motor Co. 7,798,437
546,200 Leggett & Platt, Inc. 11,675,025
175,700 Maytag Corp. 6,050,669
------------
39,291,187
--------------------------------------------------------------
Consumer Non-Durables - 2.1%
178,600 Jones Apparel Group, Inc.* 5,302,188
143,100 The Clorox Co. 5,258,925
------------
10,561,113
--------------------------------------------------------------
Electronic Technology - 36.5%
162,700 ADC Telecommunications, Inc.* 9,884,025
61,700 Altera Corp.* 6,308,825
100,000 Applied Materials, Inc.* 10,181,250
280,600 Cisco Systems, Inc.* 19,453,472
117,000 Comverse Technology, Inc.* 10,434,937
160,200 Electronics for Imaging, Inc.* 8,370,450
125,300 EMC Corp.* 17,408,869
165,800 Intel Corp. 21,025,512
83,600 International Business Machines Corp. 9,331,850
166,600 Jabil Circuit, Inc.* 6,820,188
168,400 Linear Technology Corp. 9,619,850
142,050 Microchip Technology, Inc.* 8,815,978
221,600 Nokia OYJ ADR 12,603,500
71,400 SCI Systems, Inc. * 3,802,050
117,600 Sun Microsystems, Inc.* 10,811,850
162,600 Tellabs, Inc.* 8,912,513
27,800 Teradyne, Inc.* 3,058,000
125,100 United Technologies Corp. 7,779,656
------------
184,622,775
--------------------------------------------------------------
Energy Minerals - 3.6%
119,000 Exxon Mobil Corp. 9,244,812
156,400 Royal Dutch Petroleum Co. ADR 8,973,450
------------
18,218,262
--------------------------------------------------------------
Finance - 6.6%
100,200 American International Group, Inc. 10,990,687
89,800 Federal National Mortgage Association 5,416,063
113,300 Morgan Stanley Dean Witter & Co. 8,695,775
61,400 Northern Trust Corp. 3,937,275
103,100 Wells Fargo & Co. 4,233,544
------------
33,273,344
--------------------------------------------------------------
Health Services - 3.4%
167,900 Cardinal Health, Inc. 9,244,994
265,000 Lincare Holdings, Inc.* 8,082,500
------------
17,327,494
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Health Technology - 7.6%
127,200 Amgen, Inc.* $ 7,123,200
107,200 Biomet, Inc. 3,825,700
91,700 Johnson & Johnson 7,565,250
171,500 Medtronic, Inc. 8,907,281
275,500 Schering-Plough Corp. 11,106,094
------------
38,527,525
----------------------------------------------------
Industrial Services - 1.3%
142,200 Transocean Sedco Forex, Inc. 6,683,400
----------------------------------------------------
Process Industries - 5.4%
160,500 General Electric Co. 25,238,625
14,100 The Internet HOLDRs Trust * 1,815,375
------------
27,054,000
----------------------------------------------------
Producer Manufacturing - 7.3%
173,100 Danaher Corp. 9,888,337
204,200 Herman Miller, Inc. 5,589,975
145,400 Illinois Tool Works, Inc. 9,314,688
123,700 Ingersoll-Rand Co. 5,806,169
103,700 Johnson Controls, Inc. 6,565,506
------------
37,164,675
----------------------------------------------------
Retail Trade - 6.2%
173,100 Lowe's Cos., Inc. 8,568,450
148,400 Target Corp. 9,877,875
389,200 The TJX Cos., Inc. 7,467,775
102,600 Wal-Mart Stores, Inc. 5,681,475
------------
31,595,575
----------------------------------------------------
Technology Services - 7.6%
42,700 Adobe Systems, Inc. 5,164,031
131,000 BMC Software, Inc. * 6,132,438
115,500 Microsoft Corp. * 8,056,125
239,200 Oracle Corp. * 19,121,050
------------
38,473,644
----------------------------------------------------
Transportation - 1.4%
320,800 Southwest Airlines Co. 6,957,350
----------------------------------------------------
Utilities - 0.6%
113,400 CenturyTel, Inc. 2,778,300
----------------------------------------------------
TOTAL COMMON STOCKS
(cost $358,354,904) $504,548,894
----------------------------------------------------
TOTAL INVESTMENTS
(cost $358,354,904) $504,548,894
----------------------------------------------------
</TABLE>
* Non-income producing security.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
------------------------------------------------------------------------------
Investment Abbreviations:
ADR--American Depositary Receipt
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
COMMERCE MIDCAP FUND
MidCap Fund Overview
Dear Shareholder,
We are pleased to report on the performance of the Commerce MidCap Fund (the
"Fund") for the six-month period ended April 30, 2000.
Performance Review
.For the six-month period ended April 30, 2000, the Insti-
tutional Shares of the Fund had a cumulative total return
of 24.22%, based on Net Asset Value (NAV). The Service
Shares had a cumulative total return, without sales
charge, of 24.10% for the same period based on NAV. This
compares to the Lipper Mid-Cap Core Index six-month cumu-
lative return, of 29.70% and the Standard & Poor's Mid-Cap
400 Index six-month cumulative return of 21.26%. Past per-
formance is no guarantee of future results. (The Fund's
NAV is not guaranteed by the FDIC or the U.S. Government
or by its agencies, instrumentalities, or sponsored enter-
prises.)
Portfolio Highlights
.The last six months have produced some of the most vola-
tile swings in the stock markets ever recorded. Driven by
the "new economy" frenzy in Internet and telecommunica-
tions stocks, the technology sectors of the market re-
corded unprecedented gains through mid-March. Not
surprisingly, the technology-heavy indices, particularly
the small-cap and mid-cap benchmarks, recorded impressive
gains. It was an unusual period in which greater levels of
risk in a portfolio were well rewarded.
.Most recently, the market has taken on a decidedly differ-
ent tone. Rising interest rates have burst the speculative
bubble that was driving tech stock valuations to unrealis-
tic levels. Suddenly, sectors that languished for quite
some time appear to be a safe harbor, in the short term,
in which to ride out the storm of uncertainty. Utility,
financial, energy, and health care stocks have been surg-
ing as investors scramble to diversify their holdings more
broadly.
.Near term, as the markets adjust to what necessarily must
become a slower rate of economic growth next year, we ex-
pect this level of volatility to persist. Meanwhile, we
have thoroughly reviewed the holdings in our portfolio,
and are comfortable with the long-term prospects of our
investments. We are already formulating investment strate-
gies to take advantage of the opportunities which will
present themselves in an era of global economic growth.
We thank you for your investment and look forward to your
continued confidence.
Sincerely,
MidCap Fund Team
Investment Management Group
Commerce Bank, N.A.
May 26, 2000
22
<PAGE>
COMMERCE MIDCAP FUND
Statement of Investments
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 96.7%
Commercial Services - 7.7%
115,900 Concord EFS, Inc.* $ 2,593,262
75,600 Dendrite International, Inc.* 1,729,350
74,900 Maximus, Inc.* 1,764,831
33,100 Omnicom Group, Inc. 3,014,169
48,312 Paychex, Inc. 2,542,419
88,750 The Profit Recovery Group International* 1,558,672
29,400 WPP Group PLC ADR 2,274,825
------------
15,477,528
----------------------------------------------------------------
Consumer Durables - 2.0%
27,600 Electronic Arts, Inc.* 1,669,800
96,850 JAKKS Pacific, Inc.* 1,779,619
35,650 THQ, Inc.* 552,575
------------
4,001,994
----------------------------------------------------------------
Consumer Services - 4.7%
75,300 Brinker International, Inc.* 2,400,188
66,900 CEC Entertainment, Inc.* 2,007,000
38,000 The New York Times Co. 1,565,125
152,300 USA Networks, Inc.* 3,502,900
------------
9,475,213
----------------------------------------------------------------
Electronic Technology - 32.4%
77,200 ADC Telecommunications, Inc.* 4,689,900
44,000 Altera Corp.* 4,499,000
34,400 Analog Devices, Inc.* 2,642,350
58,500 ANTEC Corp.* 3,144,375
47,000 Black Box Corp.* 3,616,062
25,800 Comverse Technology, Inc.* 2,301,037
20,300 Cymer, Inc.* 792,969
48,700 Electronics for Imaging, Inc.* 2,544,575
13,000 Harmonic, Inc.* 959,563
80,400 InterVoice-Brite, Inc.* 1,281,375
47,200 KLA-Tencor Corp.* 3,534,100
64,800 Lam Research Corp.* 2,972,700
9,900 Lattice Semiconductor Corp.* 667,013
51,200 LSI Logic Corp.* 3,200,000
47,200 Maxim Integrated Products, Inc.* 3,059,150
35,600 MTI Technology Corp.* 551,800
50,300 PerkinElmer, Inc. 2,753,925
16,400 QLogic Corp.* 1,645,125
37,100 RadiSys Corp.* 1,535,012
47,400 Rainbow Technologies, Inc.* 1,519,763
39,200 Sanmina Corp.* 2,354,450
71,900 SCI Systems, Inc.* 3,828,675
46,400 Scientific-Atlanta, Inc. 3,018,900
14,600 SDL, Inc.* 2,847,000
55,762 Symbol Technologies, Inc. 3,108,731
30,500 Vitesse Semiconductor Corp.* 2,075,906
------------
65,143,456
----------------------------------------------------------------
Energy Minerals - 1.7%
70,900 Apache Corp. 3,434,219
----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Finance - 6.3%
24,000 Capital One Financial Corp. $ 1,050,000
101,800 Federated Investors, Inc. Class B 2,875,850
21,200 Hartford Life, Inc. 1,044,100
6,200 Lehman Brothers Holdings, Inc. 508,787
35,400 Northern Trust Corp. 2,270,025
50,200 Paine Webber Group, Inc. 2,202,525
9,500 T. Rowe Price Associates, Inc. 362,188
53,900 The Bear Stearns Co., Inc. 2,310,962
------------
12,624,437
---------------------------------------------------------------
Health Services - 1.2%
42,450 Cardinal Health, Inc. 2,337,403
---------------------------------------------------------------
Health Technology - 9.0%
42,000 Allergan, Inc. 2,472,750
23,200 ArthroCare Corp.* 2,363,500
29,500 Biogen, Inc.* 1,734,969
19,800 IDEC Pharmaceuticals Corp.* 1,267,200
38,700 Medicis Pharmaceutical Corp.* 1,693,125
16,800 MedImmune, Inc.* 2,686,950
4,600 Sepracor, Inc.* 433,838
26,200 Stryker Corp. 1,883,125
28,400 Techne Corp.* 2,019,950
33,000 Watson Pharmaceuticals, Inc.* 1,482,937
------------
18,038,344
---------------------------------------------------------------
Industrial Services - 5.5%
95,000 Nabors Industries, Inc.* 3,746,562
119,000 Rowan Co., Inc.* 3,324,563
86,300 Transocean Sedco Forex, Inc. 4,056,100
------------
11,127,225
---------------------------------------------------------------
Process Industries - 1.2%
35,000 Amdocs Ltd.* 2,369,063
---------------------------------------------------------------
Producer Manufacturing - 4.9%
53,900 American Power Conversion Corp.* 1,903,344
59,900 Danaher Corp. 3,421,787
36,800 Ingersoll-Rand Co. 1,727,300
35,800 Polycom, Inc.* 2,832,675
------------
9,885,106
---------------------------------------------------------------
Retail Trade - 6.2%
59,900 Best Buy Co., Inc.* 4,836,925
37,700 Circuit City Stores-Circuit City Group 2,217,231
55,384 CVS Corp. 2,409,204
51,100 Tandy Corp. 2,912,700
------------
12,376,060
---------------------------------------------------------------
Technology Services - 11.2%
33,800 Adobe Systems, Inc. 4,087,687
57,900 BMC Software, Inc.* 2,710,444
16,400 Check Point Software Technologies Ltd.* 2,837,200
---------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
COMMERCE MIDCAP FUND
Statement of Investments (continued)
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Technology Services - (continued)
33,900 Citrix Systems, Inc.* $ 2,070,019
162,400 Informix Corp. * 1,786,400
87,400 Jack Henry & Associates, Inc. 3,452,300
41,200 PSINet, Inc. * 955,325
59,600 QRS Corp. * 1,966,800
30,200 Rational Software Corp. * 2,570,775
------------
22,436,950
-------------------------------------------------------------------------
Utilities - 2.7%
16,400 Nextel Communications, Inc. * 1,794,776
24,500 United States Cellular Corp. * 1,471,531
42,900 Western Wireless Corp. 2,131,593
------------
5,397,900
-------------------------------------------------------------------------
TOTAL COMMON STOCKS
(cost $139,232,405) $194,124,898
-------------------------------------------------------------------------
Other - 2.6%
59,600 Mid-Cap Standard & Poor's Depository Receipt ADR
Series 1 $ 5,267,150
-------------------------------------------------------------------------
TOTAL OTHER
(cost $5,082,753) $ 5,267,150
-------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<C> <S> <C> <C>
Repurchase Agreement - 1.5%
State Street Bank & Trust Co.
$2,929,000 5.55% 05/01/2000 $ 2,929,000
----------------------------------------------
TOTAL REPURCHASE AGREEMENT
(cost $2,929,000) $ 2,929,000
----------------------------------------------
TOTAL INVESTMENTS
(cost $147,244,158) $202,321,048
----------------------------------------------
</TABLE>
*Non-income producing security.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
------------------------------------------------------------------------------
Investment Abbreviations:
ADR--American Depositary Receipt
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
COMMERCE INTERNATIONAL EQUITY FUND
International Equity Fund Overview
Dear Shareholder:
We are pleased to report on the performance of the Commerce International Eq-
uity Fund (the "Fund") for the six-month period ended April 30, 2000.
Performance Review
.For the six-month period ended April 30, 2000, the Insti-
tutional Shares of the Fund had a cumulative total return
of 13.18%, based on Net Asset Value (NAV) (assumes expense
waivers). The Service Shares had a cumulative total re-
turn, without sales charge, of 13.02% for the same period
based on NAV (assumes expense waivers). This compares to
the Lipper International Equity Funds Index six-month cu-
mulative return of 13.59% and the Morgan Stanley Capital
International Europe, Australia, and Far East Index
("EAFE") six-month cumulative return of 6.83%. Past per-
formance is no guarantee of future results. (The Fund's
NAV is not guaranteed by the FDIC or the U.S. Government
or by its agencies, instrumentalities, or sponsored enter-
prises.)
Portfolio Highlights
.The global equity markets have experienced a great deal of
volatility during the past year. After several quarters of
leadership, the dynamic "new economy" stocks in the
telecom, media, and technology ("TMT") sectors declined
during the past several months, while the "old economy"
stocks (in sectors like financial, pharmaceuticals, and
energy) rose.
.The Fund's relative performance during the past year bene-
fited from an underweighting in Japan relative to its
benchmark and Lipper peer group, as Japan's equity market
weakened. In addition, strong performance from the Latin
American markets, where the Fund has an overweighting,
helped relative performance. Our "Growth at a Reasonable
Price" style has returned to favor in the first part of
this calendar year, so that stock selection has also been
aiding relative performance.
.Over 60% of the portfolio continues to be invested in the
European equity markets. Business and consumer confidence
in these markets continues to be high, and unemployment is
declining. A stronger focus on maximizing shareholder
value is evident in the numerous mergers and acquisitions
which continue apace. Japan, while showing some signs of
economic recovery, must overcome corporate restructuring
which is producing high unemployment and, therefore, a
weak consumer sector. A number of the Pacific Rim econo-
mies are enjoying strong economic rebounds. We expect that
the international equity markets will remain somewhat vol-
atile in the coming months, as investors gauge the possi-
bility of sharper U.S. interest rate increases, and
continue to reassess the "new economy" sectors.
We thank you for your investment and look forward to your
continued confidence.
Sincerely,
International Equity Team
International Equity Fund Team
Rowe Price-Fleming International,
Inc.
Investment Management Group
Commerce Bank, N.A.
May 26, 2000
25
<PAGE>
COMMERCE INTERNATIONAL EQUITY FUND
Statement of Investments
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 95.4%
Argentine Peso - 0.1%
5,310 Telefonica de Argentina SA ADR Class B (Utilities) $ 186,514
-------------------------------------------------------------------------------
Australian Dollar - 2.3%
16,000 Brambles Industries Ltd. (Transportation/Storage) 450,381
19,219 Broken Hill Proprietary Co. Ltd. (Mining-
Metals/Minerals) 206,969
30,028 Commonwealth Bank of Australia (Financial Services) 457,348
20,786 Lend Lease Corp. Ltd. (Financial Services) 225,252
61,000 Publishing & Broadcasting Ltd. (Media) 473,799
40,000 TABCORP Holdings Ltd. (Recreational Services) 214,118
126,765 Telstra Corp. Ltd. (Utilities) 510,541
102,939 The News Corp. Ltd. (Media) 1,307,290
70,302 Westpac Banking Corp. (Banks) 448,746
-----------
4,294,444
-------------------------------------------------------------------------------
Brazilian Real - 1.4%
19,977 Telecomunicacoes Brasileiras SA ADR (Telecommunications) 2,361,032
4,700 Uniao de Bancos Brasileiros SA GDR (Financial Services) 117,206
-----------
2,478,238
-------------------------------------------------------------------------------
British Pound Sterling - 17.9%
21,000 Abbey National PLC (Insurance) 239,661
27,338 AstraZeneca Group PLC (Diversified Holding Companies) 1,146,247
3,400 Baltimore Technologies PLC * (Computer
Services/Software) 356,730
20,777 BG Group PLC (Oil & Gas) 125,432
84,000 BP Amoco PLC (Oil & Gas) 725,197
139,800 Cable & Wireless PLC (Telecommunications) 2,320,274
74,888 Cadbury Schweppes PLC (Food Products) 513,027
22,000 Celltech Group PLC * (Pharmaceuticals) 363,081
32,400 Centrica PLC (Energy) 116,024
126,000 Compass Group PLC (Food Products) 1,814,626
31,000 David S. Smith Holdings PLC (Paper & Forest Products) 65,641
86,876 Diageo PLC (Beverages/Tobacco) 700,655
25,000 Electrocomponents PLC (Electronics) 251,058
6,000 GKN PLC (Industrial Machinery) 83,141
117,200 Glaxo Wellcome PLC (Pharmaceuticals) 3,622,122
12,800 Hays PLC (Diversified Holding Companies) 88,485
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
British Pound Sterling - (continued)
33,000 Hilton Group PLC (Recreational Services) $ 138,724
71,000 Kingfisher PLC (Retail Trade) 580,354
53,100 Marconi PLC (Telecommunications) 660,566
215,045 Reed International PLC (Publishing) 1,496,621
51,000 Rio Tinto PLC (Mining-Metals/Minerals) 794,045
159,488 Royal Bank of Scotland Group PLC (Financial
Services) 2,488,116
38,000 Safeway PLC (Retail Trade) 128,090
318,500 Shell Transport & Trading Co. PLC (Oil & Gas) 2,609,615
143,700 SmithKline Beecham PLC (Health & Medical Services) 1,968,858
46,000 Standard Chartered PLC (Financial Services) 620,943
95,000 Tesco PLC (Food Products) 323,184
156,980 Tomkins PLC (Diversified Holding Companies) 482,099
70,571 Unilever PLC (Consumer Products) 424,120
26,900 United News & Media PLC (Publishing) 338,859
1,235,765 Vodafone AirTouch PLC (Telecommunications) 5,656,635
96,000 WPP Group PLC (Commercial Services) 1,530,138
-----------
32,772,368
---------------------------------------------------------------------------
Canadian Dollar - 0.5%
5,410 Alcan Aluminum Ltd. (Mining-Metals/Minerals) 176,083
5,500 Nortel Networks Corp. (Telecommunications) 621,717
2,830 Royal Bank of Canada (Financial Services) 133,579
-----------
931,379
---------------------------------------------------------------------------
Danish Krone - 0.2%
15,880 Nordic Baltic Holding AB * (Financial Services) 98,845
4,060 Tele Danmark AS (Telecommunications) 297,313
-----------
396,158
---------------------------------------------------------------------------
Euro - 35.3%
Belgium - 0.5%
3,064 Dexia Belgium (Financial Services) 397,210
20,948 Fortis Belgium (Insurance) 528,847
1,750 UCB SA (Chemical Products) 58,864
-----------
984,921
---------------------------------------------------------------------------
Finland - 3.3%
103,880 Nokia Oyj (Telecommunications) 5,958,994
---------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
COMMERCE INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
France - 11.7%
6,510 Alcatel (Computers/Office) $ 1,509,151
1,320 Altran Technologies SA (Commercial Services) 269,763
20,685 Aventis SA (Pharmaceuticals) 1,137,686
2,603 Aventis SA * (Pharmaceuticals) 143,640
8,957 Axa (Insurance) 1,328,092
14,430 Banque Nationale de Paris (Banks) 1,166,218
3,330 Canal Plus (Media) 641,788
3,230 Cap Gemini SA (Computer Services/Software) 634,261
2,568 Carrefour SA (Retail Trade) 167,155
3,520 Compagnie de Saint Gobain (Chemical Products) 480,325
390 Danone (Food Products) 85,269
2,140 Hermes International (Retail Trade) 303,494
205 L'Oreal SA (Health/Personal Care) 139,029
986 Lafarge SA (Building Materials & Construction) 81,660
3,165 Legrand SA (Electronics) 589,847
1,663 LVMH (Louis Vuitton Moet Hennessy) (Consumer Non-
Durables) 697,862
26,468 Sanofi-Synthelabo SA (Health/Personal Care) 987,747
2,974 Schneider Electric SA (Electronics) 194,664
1,314 Societe Generale (Financial Services) 272,120
4,640 Societe Television Francaise 1 (Media) 3,176,323
1,274 Sodexho Alliance SA (Food Products) 190,870
7,976 STMicroelectronics NV (Electronics-Semiconductors) 1,521,981
18,784 Total Fina SA (B Shares) (Oil & Gas) 2,850,073
29,257 Vivendi (Utilities) 2,893,812
-----------
21,462,830
------------------------------------------------------------------------------
Germany - 4.5%
2,900 Allianz AG (Insurance) 1,115,984
5,369 Bayer AG (Chemical Products) 223,694
14,240 Deutsche Bank AG (Financial Services) 956,679
15,674 Deutsche Telekom AG (Telecommunications) 1,017,253
7,991 Gehe AG (Health/Personal Care) 248,450
17,992 HypoVereinsbank (Financial Services) 1,095,887
13,389 Infineon Technologies AG * (Electronics-Semiconductors) 922,024
2,936 Rhoen-Klinikum AG (Health/Personal Care) 108,233
3,420 SAP AG (Computer Services/Software) 1,604,307
1,982 Siemens AG (Electronics & Other Electrical Equipment) 293,699
12,478 Veba AG (Utilities) 626,175
-----------
8,212,385
------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Italy - 5.1%
62,000 Alleanza Assicurazioni (Insurance) $ 641,425
85,814 Banca Intesa SPA (Banks) 315,955
11,000 Banca Popolare Di Brescia (Financial Services) 1,000,010
161,309 ENI SPA (Oil & Gas) 802,154
37,000 Mediaset SPA (Media) 600,415
47,025 Mediolanum SPA (Insurance) 780,195
26,362 San Paolo-IMI SPA (Financial Services) 369,072
84,000 Tecnost SPA * (Financial Services) 294,766
240,443 Telecom Italia Mobile SPA (Utilities) 2,295,161
112,340 Telecom Italia SPA (Telecommunications) 1,570,733
178,094 UniCredito Italiano SPA (Financial Services) 722,097
-----------
9,391,983
---------------------------------------------------------------------
Luxembourg - 0.1%
966 Societe Europeenne des Satellites (Media) 146,768
---------------------------------------------------------------------
Netherlands - 7.1%
8,236 ABN AMRO Holding NV (Banks) 169,588
1,992 Akzo Nobel NV (Chemical Products) 81,546
37,830 ASM Lithography Holdings NV (Electronics-
Semiconductors) 1,478,824
15,566 CSM NV (Food Products) 267,455
6,390 Equant NV * (Computer Services/Software) 494,649
29,090 Fortis NV (Insurance) 731,489
1,286 Gucci Group NV (Textiles) 112,686
45,372 ING Groep NV (Financial Services) 2,475,686
57,700 Koninklijke (Royal) Philips Electronics NV
(Electronics) 2,573,970
5,518 KPN NV (Utilities) 556,070
19,260 Royal Dutch Petroleum Co. (Energy) 1,110,087
2,598 TNT Post Group NV (Financial Services) 56,684
13,070 United Pan-Europe Communications NV * (Media) 475,634
36,370 VNU NV (Publishing) 1,945,814
21,559 Wolters Kluwer NV (Media) 508,798
-----------
13,038,980
---------------------------------------------------------------------
Portugal - 0.1%
11,631 Jeronimo Martins SGPS SA (Food Products) 207,457
---------------------------------------------------------------------
Spain - 2.9%
48,446 Banco Bilbao Vizcaya SA (Financial Services) 660,634
131,170 Banco Santander Central Hispano SA (Banks) 1,367,759
44,546 Endesa SA (Electrical Services) 971,922
---------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
COMMERCE INTERNATIONAL EQUITY FUND
Statement of Investments (continued)
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Spain - (continued)
24,281 Repsol-YPF SA (Oil & Gas) $ 496,662
85,792 Telefonica SA (Telecommunications) 1,909,281
-----------
5,406,258
-------------------------------------------------------------------------------
Total Euro 64,810,576
-------------------------------------------------------------------------------
Hong Kong Dollar - 3.3%
144,400 Cable & Wireless HKT Ltd. (Telecommunications) 341,108
82,000 Cheung Kong Holdings Ltd. (Real Estate) 979,048
200,000 China Telecom Ltd. * (Telecommunications) 1,444,308
80,000 Dao Heng Bank Group Ltd. (Banks) 369,743
75,000 Henderson Land Development Co. Ltd. (Recreational
Services) 328,339
39,600 HSBC Holdings PLC (Financial Services) 443,576
101,000 Hutchison Whampoa Ltd. (Diversified Holding
Companies) 1,465,234
314,000 Pacific Century CyberWorks Ltd.* (Telecommunications) 584,527
21,000 Sun Hung Kai Properties Ltd. (Real Estate) 164,458
-----------
6,120,341
-------------------------------------------------------------------------------
Indian Rupee - 0.4%
26,025 ICICI Ltd. ADR (Financial Services) 660,384
-------------------------------------------------------------------------------
Japanese Yen - 21.2%
8,000 Bridgestone Corp. (Automobiles & Automobile Parts) 173,680
51,000 Canon, Inc. (Electronics & Other Electrical
Equipment) 2,332,454
29 DDI Corp. (Utilities) 332,917
36 East Japan Railway Co. (Railroads) 213,304
7,000 FANUC Ltd. (Electronics) 733,602
69 Fuji Television Network, Inc. (Media) 1,149,840
34,000 Fujitsu Ltd. (Computers/Office) 963,200
22,000 Hitachi Ltd. (Electronics) 262,741
6,000 Ito-Yokado Co. Ltd. (Retail Trade) 438,272
10,000 Kao Corp. (Cosmetics) 304,587
13,000 Kokuyo Co. Ltd. (Computer Services/Software) 184,743
7,000 KOMORI Corp. (Industrial Machinery) 95,977
14,000 Kyocera Corp. (Electronics & Other Electrical
Equipment) 2,342,082
17,000 Makita Corp. (Industrial Machinery) 147,628
31,000 Marui Co. Ltd. (Retail Trade) 582,604
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Japanese Yen - (continued)
72,000 Matsushita Electric Industrial Co. Ltd. (Electronics) $ 1,906,402
81,000 Mitsui Fudosan Co. Ltd. (Real Estate) 823,386
16,000 Murata Manufacturing Co. Ltd. (Electronics) 3,110,679
97,000 NEC Corp. (Electronics) 2,640,189
201 Nippon Telegraph & Telephone Corp. (Utilities) 2,493,543
65,000 Nomura Securities Co. Ltd. (Financial Services) 1,636,810
71 NTT Docomo, Inc. (Telecommunications) 2,372,911
20,000 Sankyo Co. Ltd. (Financial Services) 440,680
11,000 Seven-Eleven Japan Co. Ltd. (Retail Trade) 1,354,441
12,000 Shin-Etsu Chemical Co. Ltd. (Chemical Products) 634,356
27,000 Shiseido Co. Ltd. (Health/Personal Care) 341,453
900 SOFTBANK Corp. (Computer Services/Software) 221,636
2,000 SOFTBANK Corp. * (Computer Services/Software) 494,376
12,500 SONY Corp. * (Household Durables) 1,446,558
15,200 SONY Corp. (Household Durables) 1,746,350
46,000 Sumitomo Corp. (Wholesale Trade) 515,299
29,000 Sumitomo Electric Industries (Electronics & Other
Electrical Equipment) 386,344
5,000 TDK Corp. (Household Durables) 669,814
151,000 The Fuji Bank Ltd. (Banks) 1,258,159
79,000 The Sumitomo Bank Ltd. (Banks) 988,094
200,000 TOSHIBA Corp. (Electronics) 1,940,471
22,000 Yamanouchi Pharmaceutical Co. Ltd. (Pharmaceuticals) 1,162,987
-----------
38,842,569
----------------------------------------------------------------------------
Korean Won - 1.4%
13,900 Korea Telecom Corp. ADR (Telecommunications) 479,550
6,897 Samsung Electronics (Electronics) 1,864,474
700 SK Telecom Co. Ltd. (Telecommunications) 186,078
-----------
2,530,102
----------------------------------------------------------------------------
Mexican Peso - 2.1%
94,500 Fomento Economico Mexico SA de CV (Diversified
Holding Companies) 374,083
23,922 Grupo Televisa SA GDR * (Media) 1,517,552
33,290 Telefonos de Mexico SA ADR (Financial Services) 1,957,868
-----------
3,849,503
----------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
COMMERCE INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
New Zealand Dollar - 0.2%
91,000 Telecom Corp. of New Zealand Ltd. IR (Utilities) $ 384,450
-------------------------------------------------------------------------------
Norwegian Krone - 0.2%
20,360 Orkla ASA (Food Products) 314,769
-------------------------------------------------------------------------------
Singapore Dollar - 0.5%
126,696 United Overseas Bank Ltd. (Banks) 883,494
-------------------------------------------------------------------------------
Swedish Krona - 3.5%
3,738 ABB Ltd. (Electronics) 416,908
4,570 Atlas Copco AB (Industrial Machinery) 104,489
18,720 Electrolux AB (Appliance Manufacturer) 316,315
29,040 Hennes & Mauritz AB (Retail Trade) 770,859
126,720 Nordbanken Holding AB (Financial Services) 798,537
5,530 Sandvik AB (B Shares) (Industrial Machinery) 131,990
63,142 Securitas AB (Commercial Services) 1,633,833
25,700 Telefonaktiebolaget LM Ericsson AB (Telecommunications) 2,284,508
------------
6,457,439
-------------------------------------------------------------------------------
Swiss Franc - 3.8%
6,833 ABB Ltd. (Electronics) 766,684
2,599 Adecco SA (Business Services) 2,132,490
3,640 Credit Suisse Group (Financial Services) 657,482
935 Nestle SA (Food Products) 1,648,198
51 Roche Holding AG (Health/Personal Care) 532,608
610 Swisscom AG (Telecommunications) 215,059
4,060 UBS AG (Banks) 994,665
------------
6,947,186
-------------------------------------------------------------------------------
Taiwan Dollar - 0.2%
12,671 Hon Hai Precision Industry Co. Ltd. GDR * (Electronics) 348,452
-------------------------------------------------------------------------------
United States Dollar - 0.9%
19,265 Celestica, Inc. * (Commercial Services) 1,051,146
11,300 Gurpo Iusacell SA de CV ADR * (Telecommunications) 180,094
4,329 Pohang Iron & Steel Ltd. ADR (Steel) 90,909
7,817 SmartForce PLC ADR * (Computer Services/Software) 373,262
2,339 Tele Norte Leste Participacoes SA ADR
(Telecommunications) 41,666
------------
1,737,077
-------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $141,372,330) $174,945,443
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Preferred Stocks - 1.7%
Australian Dollar - 0.8%
134,215 The News Corp. Ltd. (Media) $ 1,443,788
-------------------------------------------------------------------------------
Brazilian Real - 0.7%
2,132,000 Banco Itau SA (Financial Services) 159,413
3,961,463 Petroleo Brasileiro SA (Oil & Gas) 943,686
4,755,900 Telesp Celular Participacoes SA (Telecommunications) 85,346
5,574,148 Telesp-Telecomunicacoes de Sao Palo SA
(Telecommunications) 138,898
------------
1,327,343
-------------------------------------------------------------------------------
Euro - 0.1%
Germany - 0.1%
220 SAP AG (Non-Voting) (Computer Services/Software) 129,701
-------------------------------------------------------------------------------
Total Euro 129,701
-------------------------------------------------------------------------------
United States Dollar - 0.1%
8,000 Embratel Participacoes SA ADR (Telecommunications) 180,000
-------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $3,022,276) $ 3,080,832
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Repurchase Agreement - 2.1%
State Street Bank & Trust Co.
$3,922,000 5.55% 05/01/2000 $ 3,922,000
-----------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(cost $3,922,000) $ 3,922,000
-----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $148,316,606) $181,948,275
-----------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
------------------------------------------------------------------------------
Investment Abbreviations:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
COMMERCE INTERNATIONAL EQUITY FUND
Statement of Investments (continued)
April 30, 2000 (Unaudited)
As a % of
Total Net Assets
Common and Preferred Stock Industry Classifications
<TABLE>
<S> <C>
Appliance Manufacturer 0.2%
Automobiles & Automobile Parts 0.1
Banks 4.3
Beverages/Tobacco 0.4
Business Services 1.2
Chemical Products 0.8
Commercial Services 2.4
Computer Services/Software 2.5
Computers/Office 1.3
Consumer Non-Durables 0.4
Consumer Products 0.2
Cosmetics 0.2
Diversified Holding Companies 1.9
Electrical Services 0.5
Electronics 9.6
Electronics: Other Electrical Equipment 2.9
Electronics: Semiconductors 2.1
Energy 0.7
Financial Services 10.5
Food Products 2.9
Health & Medical Services 1.1
Health/Personal Care 1.3
Household Durables 2.1
Industrial Machinery 0.3
Insurance 2.9
Media 6.3
Mining-Metals/Minerals 0.6
Oil & Gas 4.7
Pharmaceuticals 3.5
Publishing 2.1
Railroads 0.1
Real Estate 1.1
Recreational Services 0.4
Retail Trade 2.4
Steel 0.1
Telecommunications 16.8
Textiles 0.1
Transportation/Storage 0.2
Utilities 5.6
Wholesale Trade 0.3
-----------------------------------------------
TOTAL COMMON AND PREFERRED STOCK 97.1%
-----------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
COMMERCE NATIONAL TAX-FREE INTERMEDIATE BOND FUND
National Tax-Free Intermediate Bond Fund Overview
Dear Shareholder,
We are pleased to report on the performance of the Commerce National Tax-Free
Intermediate Bond Fund (the "Fund") for the six-month period ended April 30,
2000.
Performance Review
For the six months ended April 30, 2000, the Institutional
Shares of the Fund had a cumulative total return of 1.96%,
based on Net Asset Value (NAV) (assumes fee waivers and ex-
pense reimbursements). This compares to the Lipper Interme-
diate Municipal Funds Index six-month cumulative return of
1.74% and the Merrill Lynch Municipal Intermediate Index
six-month cumulative return of 1.97%. Past performance is
no guarantee of future results. (The Fund's NAV and yield
are not guaranteed by the FDIC or the U.S. Government or by
its agencies, instrumentalities, or sponsored enterprises.)
Portfolio Highlights
.The strong domestic economy, rising commodity prices and
wage pressures have led the Federal Reserve to increase
short-term interest rates by 1.25% from May 1999 to April
2000. In response, the municipal bond yield curve has
flattened. Over the last six months, short-term municipal
bond yields rose 0.80% while long-term municipal bond
yields have actually declined by 0.09%.
.In addition to the rising interest rates, the municipal
market has been hampered by a fall in demand on the insti-
tutional level, which began in the fourth quarter of 1998.
Municipal bond mutual funds have experienced net redemp-
tions, as the continued rise in interest rates has dimin-
ished their appeal. In addition, an industry-wide
profitability squeeze has motivated property and casualty
insurers to reduce their purchases of municipals in favor
of taxable fixed-income securities. Retail or individual
investors have provided the only consistent source of li-
quidity.
.Our main focus for the Fund continues to be improving its
relative yield. To accomplish this, we have concentrated
on adding higher yielding sectors such as housing, higher
education, and transportation. One exception has been the
health care sector, where we continue to cut back the
Fund's exposure. We've seen that even the most profitable
hospitals are having a difficult time adjusting to the re-
duction in Medicare reimbursement laid out in the 1997
Balanced Budget Act.
.The last six months have been a continuation of the long-
standing trend of under-performance by municipal bonds
versus U.S. Treasury securities. Since 1996, municipal
yields have risen an average of 60 basis points, whereas
U.S. Treasury bond yields are flat to slightly higher.
When yields rise, the values of existing bonds fall. Be-
cause of this trend, we believe municipal bonds now offer
investors very attractive yields relative to U.S. Treasury
bonds.
We thank you for your investment and look forward to your
continued confidence.
Sincerely,
Fixed-Income Funds Team
Investment Management Group
Commerce Bank, N.A.
May 26, 2000
31
<PAGE>
COMMERCE NATIONAL TAX-FREE INTERMEDIATE BOND FUND
Statement of Investments
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - 94.8%
California - 1.1%
Los Angeles California Unified School District GO Bonds Series C (MBIA)
(AAA/Aaa)
$ 500,000 5.00% 07/01/2018 $ 453,700
----------------------------------------------------------------------------------------------
Colorado - 1.3%
Colorado Springs Sales Tax Revenue Bonds (AA/A1)
255,000 4.40 12/01/2008 236,321
Larimer County Courthouse and Jail Facilities Certificate Participation
(FSA) (AAA/Aaa)
300,000 4.65 12/15/2008 284,421
-----------
520,742
----------------------------------------------------------------------------------------------
Florida - 1.7%
Florida State Board of Education Capital Outlay GO Bonds Series A
(AA+/Aa2)
200,000 5.25 01/01/2004 202,172
Florida State Board of Education Capital Outlay GO Bonds Series D
(AA+/Aa2)
500,000 5.75 06/01/2022 495,040
-----------
697,212
----------------------------------------------------------------------------------------------
Georgia - 2.6%
George L Smith II GA World Congress Control Revenue Bonds (Domed Stadium
Project) (MBIA) (AAA/Aaa)
500,000 6.00 07/01/2011 518,490
Georgia Private Colleges & University Revenue Bonds Series A (NR/A3)
500,000 5.25 10/01/2020 448,480
Georgia State GO Bonds Series D (AAA/Aaa)
100,000 5.40 11/01/2010 101,683
-----------
1,068,653
----------------------------------------------------------------------------------------------
Hawaii - 0.8%
Honolulu HI City and County Revenue Bonds Series A (AA- /Aa3)
300,000 7.25 07/01/2002 314,955
----------------------------------------------------------------------------------------------
Illinois - 6.3%
Chicago IL GO Bonds Series A (FGIC) (AAA/Aaa)
500,000 6.00 01/01/2019 505,630
Chicago IL Metropolitan Water Reclamation GO Bonds (AA/Aa1)
500,000 4.90 12/01/2001 501,410
450,000 5.60 12/01/2009 461,376
Chicago IL Public Building Community Building Revenue Bonds Series C
(FGIC) (AAA/Aaa)
500,000 5.50 02/01/2006 510,555
Illinois State GO Bonds (AAA/Aaa)
300,000 5.00 03/01/2017 270,660
Illinois State Sales Tax Revenue Bonds Series P
(AAA/Aa2)
300,000 6.50 06/15/2022 320,817
-----------
2,570,448
----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - (continued)
Indiana - 5.5%
Beech Grove IN Sch Building Revenue Bonds (MBIA) (AAA/Aaa)
$ 400,000 5.63% 07/05/2024 $ 387,892
Elkhart County IN Hospital Authority Revenue Bonds
(NR/A1)
700,000 5.25 08/15/2018 605,031
Merrillville IN Multi. Sch Building Revenue Bonds
(AAA/Aaa)
500,000 6.65 07/01/2006 539,670
Plymouth IN Multi. Sch Building Revenue Bonds
(AAA/Aaa)
700,000 5.75 07/01/2006 722,624
-----------
2,255,217
----------------------------------------------------------------------------------------------
Iowa - 2.5%
Bettendorf GO Bonds Series A (AMBAC) (AAA/Aaa)
250,000 4.70 06/01/2003 248,720
Iowa City Sewer Revenue Bonds (AMBAC) (AAA/Aaa)
250,000 6.00 07/01/2008 253,865
Iowa Student Loan Liquidity Corp. Revenue Bonds Series E (NR/Aaa)
500,000 5.70 06/01/2009 501,730
-----------
1,004,315
----------------------------------------------------------------------------------------------
Kansas - 3.6%
Kansas State Development Financial Authority Revenue
Bonds Department of Corrections Series A-1
(MBIA) (AAA/Aaa)
275,000 5.00 02/01/2012 261,792
Kansas State Development Financial Authority Revenue
Bonds Public Water Supply (AA-/A2)
500,000 5.00 04/01/2016 463,070
Olathe KS Certificate Participation Series A (NR/A-)
250,000 4.80 09/01/2007 241,497
Ottawa Kansas Educational Facilities Revenue Bonds
(Ottawa University Project) (NR/NR)
350,000 5.60 10/01/2018 321,167
Sedgwick County GO Bonds Series A (AA/Aa1)
200,000 4.25 08/01/2004 192,790
-----------
1,480,316
----------------------------------------------------------------------------------------------
Kentucky - 3.0%
Boone County KY Sch Building Revenue Bonds (NR/Aa3)
285,000 5.70 02/01/2016 286,183
Jefferson County KY GO Bonds Series C (AA/Aa2)
465,000 5.38 05/15/2007 463,777
460,000 5.45 05/15/2008 459,397
-----------
1,209,357
----------------------------------------------------------------------------------------------
Louisiana - 2.0%
Caddo Parish LA Parishwide School District GO Bonds
(MBIA) (AAA/Aaa)
265,000 6.25 03/01/2005 278,682
Orleans Parish LA Parishwide School District Revenue
Bonds (NR/Aaa)
500,000 7.00 09/01/2003 531,365
-----------
810,047
----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
COMMERCE NATIONAL TAX-FREE INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - (continued)
Maine - 1.5%
Regional Waste System ME Solid Waste Revenue Bonds Series P (AA/NR)
$ 300,000 5.25% 07/01/2004 $ 302,430
300,000 5.38 07/01/2005 303,816
-----------
606,246
----------------------------------------------------------------------------------------------
Massachusetts - 1.8%
Massachusetts State GO Bonds Series A (AAA/Aaa)
700,000 5.60 02/01/2007 719,705
----------------------------------------------------------------------------------------------
Michigan - 8.5%
Detroit Michigan Sewage Disposal Revenue Bonds Series A (AAA/Aaa)
300,000 6.00 07/01/2004 310,779
Forest Hills Michigan Public Schools GO Bonds (AA/Aa2)
500,000 4.25 05/01/2010 445,310
Greenville Public Schools GO Bonds (MBIA) (AAA/Aaa)
200,000 5.75 05/01/2007 207,086
Grosse Isle Township Michigan Building Authority Revenue Bonds (MBIA)
(AAA/Aaa)
325,000 5.45 04/01/2016 318,217
Michigan State Hospital Finance Authority Revenue Bonds (BBB+/Baa1)
150,000 5.45 11/15/2009 138,066
Michigan State Hospital Finance Authority Revenue Bonds Series A
(AA/Aa2)
1,100,000 6.13 11/15/2026 1,086,470
Michigan State Housing Development Authority Revenue Bonds Series B
(AAA/Aaa)
500,000 4.80 12/01/2010 462,755
Waterford Township School District Revenue Bonds (Q-SBLF) (AA+/Aa2)
500,000 4.85 06/01/2010 476,900
-----------
3,445,583
----------------------------------------------------------------------------------------------
Minnesota - 2.2%
Minnesota State Housing and Finance Agency Revenue Bonds Series D
(AA+/Aa2)
320,000 5.35 01/01/2005 323,523
Plainview MN Independent School District #810 GO Bonds Series A (NR/Aa1)
250,000 5.63 02/01/2018 247,625
Rochester MN Health Care Facilities Revenue Bonds Series I (AA+/NR)
300,000 5.80 11/15/2007 309,024
-----------
880,172
----------------------------------------------------------------------------------------------
Missouri - 8.3%
Belton MO Certificate Participation Series B (NR/Aaa)
535,000 4.70 03/01/2012 496,887
Crawford County MO Reorganized School District GO Bonds (AA+)
250,000 5.45 03/01/2013 250,000
</TABLE>
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - (continued)
Missouri - (continued)
Howard Bend MO Levee District Special Tax Revenue Bonds (NR/NR)
$ 670,000 5.30% 03/01/2008 $ 651,495
Lebanon MO Reorganized School District #R-3 Direct Deposit Program GO
Bonds (AA+)
700,000 5.45 03/01/2014 693,910
Missouri State Health & Educational Facility Revenue Bonds (Freeman
Health Systems Project) (BBB+/NR)
500,000 4.75 02/15/2005 470,265
Osage Beach MO Waterworks and Sewer System Revenue Bonds (NR/NR)
280,000 4.75 12/01/2011 258,541
St. Charles County MO Industrial Development Revenue Bonds (Housing
Vanderbilt Apts) (NR/NR)
250,000 5.00 02/01/2029 236,397
St. Peters GO Bonds (NR/Aaa)
290,000 7.20 01/01/2009 330,223
-----------
3,387,718
----------------------------------------------------------------------------------------------
Montana - 0.5%
Montana State Higher Education Student Assistance Corp. Student Loan
Revenue Bonds Series B (NR/Aaa)
200,000 5.20 12/01/2002 201,044
----------------------------------------------------------------------------------------------
Nebraska - 1.9%
Nebraska Public Power District Revenue Bonds Series A (AAA/Aaa)
250,000 5.10 01/01/2006 255,423
Omaha Public Power Revenue Bonds Series A
(AA/Aa2)
500,000 5.00 02/01/2001 502,505
-----------
757,928
----------------------------------------------------------------------------------------------
Nevada - 1.1%
Clark County School District GO Bonds Series B
(AAA/Aaa)
200,000 5.30 05/01/2004 202,292
Nevada Housing Division Single Family Revenue Bonds Series A-2 (AMT)
(FHA) (NR/Aaa)
250,000 4.10 10/01/2004 237,350
-----------
439,642
----------------------------------------------------------------------------------------------
New York - 9.0%
New York Dormitory Authority Revenue Bonds (MBIA-IBC) (AAA/Aaa)
500,000 4.50 07/01/2006 479,655
New York GO Bonds Series A (A-/A3)
500,000 5.25 08/01/2007 498,470
New York GO Bonds Series A (AMBAC-TCRS)
(AAA/Aaa)
250,000 7.00 08/01/2004 267,798
New York GO Bonds Series J (A-/A3)
500,000 5.25 08/01/2011 489,165
</TABLE>
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
33
<PAGE>
COMMERCE NATIONAL TAX-FREE INTERMEDIATE BOND FUND
Statement of Investments (continued)
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - (continued)
New York - (continued)
New York New York City Transitional Finance Revenue Bonds Series B
(AA/Aa3)
$ 500,000 6.00% 11/15/2013 $ 523,940
New York State Dorm Authority Revenue Bonds Series B (A/A2)
540,000 5.00 05/15/2008 523,049
New York State Energy Research and Development Revenue Bonds Series A
(A-/Ba1)
250,000 7.15 12/01/2020 264,688
New York State Urban Development Corp. Revenue Bonds (BBB+/Baa1)
500,000 6.25 01/01/2007 524,040
Somers New York Central School District GO Bonds
(NR/A1)
80,000 4.10 05/01/2000 80,000
-----------
3,650,805
----------------------------------------------------------------------------------------------
North Dakota - 1.0%
North Dakota State Municipal Bond Bank Revenue Bonds (State Revolving
Funding Program) Series A (NR/Aa2)
400,000 6.00 10/01/2020 402,436
----------------------------------------------------------------------------------------------
Oklahoma - 1.0%
Tulsa County OK Public Facilities Authority Capital Revenue Bonds (A/NR)
400,000 6.20 11/01/2014 402,940
----------------------------------------------------------------------------------------------
Oregon - 1.2%
Oregon State Housing & Community Services Department Revenue Bonds
Series D (NR/Aa2)
485,000 5.55 07/01/2006 489,743
----------------------------------------------------------------------------------------------
Pennsylvania - 1.3%
Pennsylvania State Industrial Development Authority Revenue Bonds
(AAA/Aaa)
500,000 6.00 07/01/2008 525,605
----------------------------------------------------------------------------------------------
Rhode Island - 1.7%
Rhode Island State Student Loan Revenue Bonds Series 3 (AMBAC) (NR/Aaa)
180,000 5.70 12/01/2012 178,083
190,000 5.75 12/01/2013 187,701
205,000 5.80 12/01/2014 202,216
125,000 5.90 12/01/2015 123,739
-----------
691,739
----------------------------------------------------------------------------------------------
South Carolina - 1.3%
York County School District #1 GO Bonds Series A (MBIA SCSDE) (AAA/Aaa)
500,000 7.00 07/01/2003 529,910
----------------------------------------------------------------------------------------------
South Dakota - 5.0%
South Dakota Building Authority Revenue Bonds (A+/A1)
300,000 6.00 09/01/2003 309,531
</TABLE>
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - (continued)
South Dakota - (continued)
South Dakota Housing Development Authority Revenue Bonds (AAA/Aa1)
$ 660,000 4.60% 05/01/2005 $ 635,989
315,000 4.65 05/01/2006 306,546
South Dakota State Health & Educational Revenue Bonds (BBB+/Baa2)
250,000 7.25 04/01/2022 269,167
South Dakota State Health & Educational Revenue Bonds (MBIA) (AAA/Aaa)
500,000 5.00 09/01/2004 498,620
-----------
2,019,853
----------------------------------------------------------------------------------------------
Tennessee - 1.2%
Shelby County GO Bonds Series A (AA+/Aa3)
500,000 5.63 06/01/2008 512,760
----------------------------------------------------------------------------------------------
Texas - 3.1%
Guadalupe County TX Revenue Bonds (NR/Aaa)
340,000 5.60 02/01/2005 347,915
Katy TX Independent School District GO Bonds Series A (AAA/Aaa)
200,000 4.75 02/15/2027 164,518
San Antonio GO Bonds (AA+/Aa2)
200,000 5.20 08/01/2002 201,794
Tarrant County Water Control & Improvement Revenue Bonds (AAA/Aaa)
140,000 5.00 03/01/2009 137,445
Texas A&M University Revenue Bonds (AA+/Aa2)
200,000 5.55 05/15/2001 202,396
Texas State GO Bonds Series A (AA/Aa1)
200,000 5.65 10/01/2008 204,368
-----------
1,258,436
----------------------------------------------------------------------------------------------
Utah - 3.3%
Alpine School District GO Bonds (FGIC-TCRS) (AAA/Aaa)
250,000 5.40 03/15/2005 251,613
Intermountain Power Agency Revenue Bonds Series A (AAA/Aaa)
800,000 6.00 07/01/2008 834,496
Intermountain Power Agency Revenue Bonds Series B (A+/A1)
250,000 5.10 07/01/2003 250,777
-----------
1,336,886
----------------------------------------------------------------------------------------------
Washington - 7.9%
King County GO Bonds Series D (AA+/Aa1)
500,000 6.20 12/01/2000 505,200
Kitsap County School District No 400 Revenue
Bonds (NR/A1)
680,000 6.05 12/01/2000 685,916
Metro. Washington DC Airports Authority Revenue Bonds Series B (AAA/Aaa)
500,000 5.25 10/01/2012 490,600
</TABLE>
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
34
<PAGE>
COMMERCE NATIONAL TAX-FREE INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - (continued)
Washington - (continued)
Pierce County Sewer Improvements Revenue
Bonds (A+/A1)
$ 290,000 5.45% 02/01/2008 $ 291,438
Seattle GO Bonds Series A (AA+/Aa1)
150,000 5.30 08/01/2013 147,191
Spokane County School District #354 GO Bonds (A+/A2)
120,000 5.20 12/01/2006 119,664
Vancouver Water & Sewer Revenue Bonds (FGIC)
(AAA/Aaa)
250,000 4.70 06/01/2001 250,902
Washington Higher Educational Facility University of Puget Sound Revenue
Bonds (A+/A2)
500,000 5.00 10/01/2006 489,090
Washington State GO Bonds Series DD-12 & CC-9 (AA+/Aa1)
250,000 5.38 03/01/2008 253,245
-----------
3,233,246
----------------------------------------------------------------------------------------------
Wisconsin - 1.1%
Milwaukee GO Bonds Series E (AA+/Aa1)
250,000 5.50 06/15/2010 253,218
Wisconsin State GO Bonds Series 3 (AA/Aa2)
200,000 5.25 11/01/2002 202,232
-----------
455,450
----------------------------------------------------------------------------------------------
Wyoming - 0.5%
Wyoming Community Development Authority Housing Revenue Bonds Series 5
(AA/Aa2)
200,000 4.80 06/01/2009 187,820
----------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BOND OBLIGATIONS
(Cost $39,386,116) $38,520,629
----------------------------------------------------------------------------------------------
Short-Term Obligations # - 6.2%
Nevada - 1.5%
Reno Nevada Hospital Revenue Bonds (St. Mary's Regional Medical Ctr)
Series B (A1+/VMIG1)
$ 600,000 6.00% 05/01/2000 $ 600,000
----------------------------------------------------------------------------------------------
Texas - 4.7%
Grapevine Industrial Development Corp. Revenue Bonds American Airlines-
B2 (Bayerische Landesbank LOC, Expire 12/31/02) (NR/P1)
500,000 6.00 05/01/2000 500,000
</TABLE>
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Short-Term Obligations - (continued)
Texas - (continued)
Harris County Health Facilities Development Corp. Revenue Bonds St.
Luke's Episcopal Hospital Series 1997 A (A1+/NR)
$ 95,000 6.00% 05/01/2000 $ 95,000
Harris County Health Facilities Development Corp. Revenue Bonds St.
Luke's Episcopal Hospital Series 1997 B (A1+/NR)
1,300,000 6.00 05/01/2000 1,300,000
-----------
1,895,000
----------------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBILIGATIONS
(Cost $2,495,000) $ 2,495,000
----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $41,881,116) $41,015,629
----------------------------------------------------------------------------------------------
</TABLE>
# Variable rate security. Coupon rate disclosed is that which is in effect at
April 30, 2000.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
------------------------------------------------------------------------------
Investment Abbreviations:
AMBAC--Insured by American Municipal Bond Assurance Corp.
AMT--Alternative Minimum Tax
FGIC--Insured by Financial Guaranty Insurance Co.
FHA--Insured by Federal Housing Administration
FSA--Insured by Financial Security Assurance Co.
GO--General Obligation
LOC--Letter of Credit
MBIA--Insured by Municipal Bond Investors Assurance
NR--Not Rated
Q-SBLF--Qualified-School Bond Loan Fund
TCRS--Transferable Custodial Receipts
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
35
<PAGE>
COMMERCE MISSOURI TAX-FREE INTERMEDIATE BOND FUND
Missouri Tax-Free Intermediate Bond Fund Overview
Dear Shareholder,
We are pleased to report on the performance of the Commerce Missouri Tax-Free
Intermediate Bond Fund (the "Fund") for the six-month period ended April 30,
2000.
Performance Review
For the six months ended April 30, 2000, the Institutional
Shares of the Fund had a cumulative total return of 1.89%,
based on Net Asset Value (NAV) (assumes fee waivers and ex-
pense reimbursements). This compares to the Lipper Interme-
diate Municipal Funds Index six-month cumulative return of
1.74% and the Merrill Lynch Municipal Intermediate Index
six-month cumulative return of 1.97%. Past performance is
no guarantee of future results. (The Fund's NAV and yield
are not guaranteed by the FDIC or the U.S. Government or by
its agencies, instrumentalities, or sponsored enterprises.)
Portfolio Highlights
.The strong domestic economy, rising commodity prices and
wage pressures have led the Federal Reserve to increase
short-term interest rates by 1.25% from May 1999 to April
2000. In response, the municipal bond yield curve has
flattened. Over the last six months, short-term municipal
bond yields rose 0.80% while long-term municipal bond
yields have actually declined by 0.09%.
.In addition to the rising interest rates, the municipal
market has been hampered by a fall in demand on the insti-
tutional level, which began in the fourth quarter of 1998.
Municipal bond mutual funds have experienced net redemp-
tions, as the continued rise in interest rates has dimin-
ished their appeal. In addition, an industry-wide
profitability squeeze has motivated property and casualty
insurers to reduce their purchases of municipals in favor
of taxable fixed-income securities. Retail or individual
investors have provided the only consistent source of li-
quidity.
.Our main focus for the Fund continues to be improving its
relative yield. To accomplish this, we have concentrated
on adding higher yielding sectors such as housing, higher
education, and transportation. One exception has been the
health care sector, where we continue to cut back the
Fund's exposure. We've seen that even the most profitable
hospitals are having a difficult time adjusting to the re-
duction in Medicare reimbursement laid out in the 1997
Balanced Budget Act.
.The last six months have been a continuation of the long-
standing trend of underperformance by municipal bonds ver-
sus U.S. Treasury securities. Since 1996, municipal yields
have risen an average of 60 basis points, whereas U.S.
Treasury bond yields are flat to slightly higher. When
yields rise, the values of existing bonds fall. Because of
this trend, we believe municipal bonds now offer investors
very attractive yields relative to U.S. Treasury bonds.
We thank you for your investment and look forward to your
continued confidence.
Sincerely,
Fixed-Income Funds Team
Investment Management Group
Commerce Bank, N.A.
May 26, 2000
36
<PAGE>
COMMERCE MISSOURI TAX-FREE INTERMEDIATE BOND FUND
Statement of Investments
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - 96.6%
Michigan - 2.7%
Michigan State Hospital Finance Authority Revenue Bonds Series A
(AAA/Aaa)
$ 500,000 5.50% 11/15/2010 $ 497,620
500,000 6.13 11/15/2026 493,850
-----------
991,470
----------------------------------------------------------------------------------------------
Missouri - 90.6%
American National Fish & Wildlife Museum District Revenue Bonds (NR/NR)
500,000 5.70 09/01/2005 493,420
Belton Capital Improvement Sales Tax Revenue Bonds (MBIA) (AAA/Aaa)
200,000 5.00 03/01/2005 199,816
200,000 5.00 03/01/2006 198,590
Belton MO Certificate Participation Series B (NR/Aaa)
500,000 4.75 03/01/2013 459,630
Branson MO Reorganized School District Revenue Bonds (AAA/Aaa)
300,000 5.50 03/01/2014 302,580
Chesterfield GO Bonds (NR/Aa1)
200,000 4.90 02/15/2019 174,890
Clay County Public Building Authority Leasehold Revenue Bonds Series A
(FSA) (AAA/Aaa)
665,000 5.00 05/15/2009 655,025
Clay County Public Building Authority Leasehold Revenue Bonds Series C
(FSA) (AAA/Aaa)
40,000 5.00 05/15/2009 39,400
Columbia Water & Electricity Revenue Bonds Series A (AA/A1)
300,000 5.40 10/01/2002 304,038
Fallon MO Certificate Participation (AMBAC) (AAA/Aaa)
300,000 5.75 12/01/2004 309,090
Hazelwood School District GO Bonds (NR/Aa3)
150,000 5.15 03/01/2004 151,181
Howard Bend MO Levee District Special Tax Revenue Bonds (NR/NR)
635,000 5.25 03/01/2007 618,300
Independence MO School District GO Bonds (AA+/Aa3)
230,000 5.25 03/01/2013 226,819
540,000 5.00 03/01/2018 486,319
Jackson County MO Leasehold Revenue Bonds (AMBAC) (AAA/Aaa)
300,000 4.00 12/01/2004 280,554
Jackson County MO School District #7 Lee's Summit GO Bonds (NR/Aa3)
250,000 5.60 03/01/2008 252,120
----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - (continued)
Missouri - (continued)
Jackson County Reorganized School District #7 Lee's Summit Direct
Deposit Program (AA+/Aa1)
$ 360,000 5.10% 03/01/2011 $ 354,388
Jackson County Reorganized School District #7 Lee's Summit Lease
Partnership COP Bonds (AMBAC) (AAA/Aaa)
265,000 4.50 03/01/2004 259,308
Kansas City MO GO Bonds (AA/Aa3)
200,000 4.50 06/01/2004 194,918
Kansas City MO Water Revenue Bonds Series A (AA/Aa3)
735,000 5.80 12/01/2018 743,070
Kansas City MO Water Revenue Bonds Series B (AA/Aa3)
270,000 5.60 12/01/2001 273,972
Lebanon MO Reorganized School District #R-3 Direct Deposit Program GO
Bonds (AA+)
270,000 5.45 03/01/2014 267,651
Missouri Higher Education Student Loan Revenue Bonds Series EE (NR/Aaa)
500,000 4.50 02/15/2010 452,050
Missouri Higher Education Student Loan Revenue Bonds Series RR (NR/A2)
500,000 5.85 07/15/2010 496,165
Missouri Sate Development Finance Board Infrastructure Facilities
(Hartman Heritage Centre PJ-A) (AMBAC) (NR/Aaa)
500,000 5.55 04/01/2012 502,415
Missouri State Certificate Participation (AAA/Aaa)
500,000 5.13 06/01/2017 459,360
Missouri State Environmental Improvement & Energy Resources Authority
Pollution Control Revenue Bonds (Elec Coop Thomas Hill) (AA/A1)
250,000 5.50 12/01/2004 253,415
500,000 5.50 12/01/2006 506,575
Missouri State Environmental Improvement & Energy Resources Authority
Pollution Control Revenue Bonds (Tri-County Water Authority Project)
(AA/NR)
445,000 5.60 04/01/2011 453,410
500,000 6.00 04/01/2022 488,655
Missouri State Environmental Improvement & Energy Resources Authority
Pollution Control Revenue Bonds Series A (NR/Aa1)
150,000 5.25 07/01/2002 151,667
Missouri State Environmental Improvement & Energy Resources Authority
Pollution Control Revenue Bonds Series B (State Revolving Funds
Program) (NR/Aaa)
400,000 5.75 07/01/2020 397,604
Missouri State Environmental Improvement & Energy Resources Authority
Pollution Control Revenue Bonds Series C (NR/Aa1)
205,000 4.75 01/01/2001 205,584
500,000 4.90 01/01/2002 501,550
----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
37
<PAGE>
COMMERCE MISSOURI TAX-FREE INTERMEDIATE BOND FUND
Statement of Investments (continued)
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - (continued)
Missouri - (continued)
Missouri State Environmental Improvement & Energy Resources Authority
Pollution Control Revenue Bonds Series E (NR/Aa1)
$ 290,000 4.38% 07/01/2000 $ 289,983
Missouri State Fourth State Building GO Bonds Series A (AAA/Aaa)
500,000 7.00 04/01/2004 536,015
150,000 5.30 08/01/2008 151,655
Missouri State GO Bonds Series A (AAA/Aaa)
500,000 4.50 08/01/2002 497,860
500,000 6.50 08/01/2014 511,440
Missouri State Health & Educational Facility Revenue Bonds (Barnes-
Jewish, Inc.) (AA/Aa2)
400,000 6.00 05/15/2007 413,644
150,000 6.00 05/15/2011 154,015
Missouri State Health & Educational Facility Revenue Bonds (Central
Institute for the Deaf) (AA/NR)
500,000 5.85 01/01/2022 480,975
Missouri State Health & Educational Facility Revenue Bonds (Children
Mercy Hosp.) (A+/NR)
750,000 5.25 05/15/2018 669,945
Missouri State Health & Educational Facility Revenue Bonds (Freeman
Health Systems Project) (BBB+/NR)
500,000 4.75 02/15/2005 470,265
Missouri State Health & Educational Facility Revenue Bonds (prerefunded
to 06/01/01) (MBIA) (AAA/Aaa)
300,000 6.63 06/01/2011 312,501
Missouri State Health & Educational Facility Revenue Bonds (The Barstow
School) (NR/NR)
405,000 4.75 10/01/2010 364,658
Missouri State Health & Educational Facility Revenue Bonds Series B
(Health Midwest) (MBIA) (AAA/Aaa)
150,000 6.10 06/01/2011 155,528
Missouri State Housing Development Community Mortgage Revenue Bonds
(AMT-Singlefam-Homeowner Loan A-1) (GNMA/FNMA) (AAA/NR)
640,000 5.90 09/01/2012 642,214
Missouri State Housing Development Community Mortgage Revenue Bonds
(AMT-Singlefam-Homeowner Loan A-2) (GNMA/FNMA) (AAA/NR)
180,000 5.40 03/01/2006 180,788
Missouri State Housing Development Community Mortgage Revenue Bonds
(AMT-Singlefam-Homeowner Loan B-2) (GNMA/FNMA) (AAA/NR)
350,000 4.55 03/01/2004 342,083
350,000 5.20 03/01/2008 345,552
Missouri State Housing Development Community Mortgage Revenue Bonds
(Single Family Homeownership-B) (GNMA/FNMA) (AAA/NR) #
140,000 5.50 03/01/2006 141,376
Missouri State Housing Development Community Mortgage Revenue Bonds
Series C (GNMA/FNMA) (AAA/NR) #
180,000 4.80 09/01/2001 180,263
----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - (continued)
Missouri - (continued)
Missouri State Housing Development Community Mortgage Revenue Bonds
Series C-2 (GNMA/FNMA) (AAA/NR)
$ 210,000 4.90% 03/01/2007 $ 203,881
Missouri State Regional Convention & Sports Complex Authority Revenue
Bonds (A+/Aa3)
640,000 4.75 08/15/2004 631,674
500,000 5.20 08/15/2007 498,165
Missouri State Water Pollution Control GO Bonds Series A (AAA/Aaa)
300,000 5.60 08/01/2010 306,783
New Liberty Hospital District Revenue Bonds (MBIA) (NR/Aaa)
375,000 4.25 12/01/2002 365,591
515,000 5.00 12/01/2010 496,851
380,000 5.13 12/01/2012 369,520
Osage Beach MO Waterworks and Sewer System Revenue Bonds (NR/NR)
220,000 4.75 12/01/2011 203,139
575,000 4.95 12/01/2013 532,910
Richmond Heights CTFS Partnership Capital Improvement Projects Series A
Certificate Participation (MBIA) (AAA/Aaa)
550,000 4.60 02/15/2005 532,543
575,000 4.70 02/15/2006 557,186
Rolla MO Recreational Center GO Bonds (AMBAC) (AAA/Aaa)
500,000 4.80 03/01/2007 493,675
Springfield MO School Dist #12 Revenue Bonds Series B (FGIC) (AAA/Aaa)
620,000 9.50 03/01/2007 776,773
Springfield Public Building Corp. Leasehold Revenue Bonds (AAA/NR)
225,000 4.50 03/01/2008 210,607
250,000 4.85 03/01/2010 237,842
St. Charles County MO Community College GO Bonds (FGIC) (NR/Aaa)
890,000 5.00 02/15/2016 824,932
St. Charles County MO Industrial Development Revenue Bonds (Housing
Vanderbilt Apts) (NR/NR)
350,000 5.00 02/01/2029 330,957
St. Charles County MO School District Series A (AAA/Aaa)
400,000 5.05 03/01/2019 362,976
St. Charles County MO School District GO Bonds Series A (AMBAC)
(AAA/Aaa)
150,000 5.75 03/01/2011 151,617
St. Francois County MO School District R-III GO Bonds (AA+/NR)
285,000 4.95 03/01/2016 257,936
St. Louis Board of Education GO Bonds Series A (FGIC State Aid Direct
Deposit) (AAA/Aaa)
500,000 4.40 04/01/2007 475,870
St. Louis County MO Certificate Partnership (AA/Aa2)
500,000 4.40 05/15/2011 451,010
----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
38
<PAGE>
COMMERCE MISSOURI TAX-FREE INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Municipal Bond Obligations - (continued)
Missouri - (continued)
St. Louis County MO GO Bonds Series B (NR/Aaa)
$ 200,000 5.25% 02/01/2007 $ 200,490
750,000 5.30 02/01/2008 752,782
St. Louis County MO Regional Convention & Sports Complex Authority
Revenue Bonds Series C (NR/Aaa)
530,000 7.90 08/15/2021 577,122
St. Louis County MO School District GO Bonds (FGIC) (AAA/Aaa)
200,000 5.40 04/01/2003 203,324
St. Louis County MO School District GO Bonds Lindbergh (NR/Aa2)
715,000 6.60 02/15/2003 746,388
200,000 5.40 02/15/2010 202,586
St. Louis MO Airport Revenue Bonds (Lambert St. Louis International)
Series B AMT (FGIC) (AAA/Aaa)
395,000 6.00 07/01/2009 413,079
St. Peters GO Bonds (NR/Aaa)
500,000 7.20 01/01/2009 569,350
150,000 5.80 01/01/2010 155,154
St. Peters GO Bonds (FGIC) (NR/Aaa)
695,000 7.20 01/01/2008 784,655
University Missouri Development Foundation Power Leasehold Revenue Bonds
(AAA/NR)
500,000 5.75 05/01/2013 519,215
University Missouri Health Facilities Revenue Bonds Series A (AMBAC)
(AAA/Aaa)
150,000 5.20 11/01/2010 148,329
University of Missouri Systems Facilities Revenue Bonds (AA+/Aa2)
250,000 4.60 11/01/2000 250,300
-----------
33,749,501
----------------------------------------------------------------------------------------------
Puerto Rico - 3.3%
Puerto Rico Commonwealth GO Bonds (FSA-CR) (AAA/NR)
500,000 5.38 07/01/2025 471,385
Puerto Rico Commonwealth GO Bonds (MBIA) (AAA/Aaa)
350,000 5.38 07/01/2021 334,022
Puerto Rico Municipal Finance Agency GO Bonds (Refunding Series B) (FSA)
(AAA/Aaa)
455,000 5.50 08/01/2018 446,742
-----------
1,252,149
----------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BOND OBLIGATIONS
(Cost $37,027,782) $35,993,120
----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Short-Term Obligations # - 3.0%
Missouri - 3.0%
Missouri State Health & Educational Facility Revenue Bonds (A1+/VMIG1)
$ 300,000 5.80% 05/01/2000 $ 300,000
Missouri State Health & Educational Facility Revenue Bonds (Drury
College) (Mercantile Bank NA LOC, Expire 12/14/04) (NR/A1)
400,000 6.15 05/01/2000 400,000
Missouri State Health & Educational Facility Revenue Bonds (St. Louis
University) Series A (Bank of America NA SPA, Expire 07/01/04) (AA-
/A1)
100,000 6.05 05/01/2000 100,000
Missouri State Health & Educational Facility Revenue Bonds (The
Washington University) Series C (Morgan Guaranty Trust SPA, Expire
02/06/01) (A-1+/VMIG1)
300,000 5.80 05/01/2000 300,000
----------------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(Cost $1,100,000) $ 1,100,000
----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $38,127,782) $37,093,120
----------------------------------------------------------------------------------------------
</TABLE>
# Variable rate security. Coupon rate disclosed is that which is in effect at
April 30, 2000.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
------------------------------------------------------------------------------
Investment Abbreviations:
<TABLE>
<C> <S>
AMBAC --Insured by American Municipal Bond Assurance Corp.
AMT --Alternative Minimum Tax
COP --Certificate of Participation
CTFS --Certificates
FGIC --Insured by Financial Guaranty Insurance Co.
FNMA --Insured by Federal National Mortgage Association
FSA --Insured by Financial Security Assurance Co.
GNMA --Insured by Government National Mortgage Association
GO --General Obligation
LOC --Letter of Credit
MBIA --Insured by Municipal Bond Investors Assurance
NR --Not Rated
TCRS --Transferable Custodial Receipts
------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
39
<PAGE>
COMMERCE FUNDS
Statements of Assets and Liabilities
April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Short-Term
Government Balanced
Fund Bond Fund Fund
Assets:
<S> <C> <C> <C>
Investments in securities, at value
(Cost $102,805,173, $353,497,392,
$103,427,725, $69,835,909,
$358,354,904, $147,244,158,
$148,316,606, $41,881,116 and
$38,127,782, respectively) $100,185,203 $336,048,428 $117,657,798
Cash and Foreign Currency 1,514 325 181
Receivables:
Investment securities sold, at
value 11,598 26,920 1,450,136
Dividend and Interest, at value 991,692 3,777,070 497,153
Fund shares sold 60,331 746,670 89,005
Deferred organization expenses, net 532 245 548
Other 4,091 3,121 1,060
-------------------------------------------------------------------------------
Total assets 101,254,961 340,602,779 119,695,881
-------------------------------------------------------------------------------
Liabilities:
Payables:
Due to Bank -- -- --
Investment securities purchased, at
value -- -- 303,285
Fund shares redeemed 671,775 3,010,134 15,332
Dividends and distributions 242,415 634,620 --
Advisory fees 20,450 140,678 61,776
Administrative fees 12,716 42,203 15,009
Shareowner servicing fees 4,476 23,707 21,076
Distribution fees-service shares 396 -- 5,125
Accrued expenses and other liabili-
ties 43,299 133,085 58,240
-------------------------------------------------------------------------------
Total liabilities 995,527 3,984,427 479,843
-------------------------------------------------------------------------------
Net Assets:
Paid-in capital 103,740,391 355,094,255 98,675,562
Accumulated undistributed (distribu-
tion in excess of) net investment
income (loss) 7,351 2,797 369,203
Accumulated net realized gain (loss)
on investment transactions and
foreign currency transactions (868,338) (1,029,736) 5,941,200
Net unrealized gain (loss) on in-
vestments and translation of assets
and liabilities denominated in for-
eign currency (2,619,970) (17,448,964) 14,230,073
-------------------------------------------------------------------------------
Net Assets $100,259,434 $336,618,352 $119,216,038
-------------------------------------------------------------------------------
Shares Outstanding:
Total shares outstanding, no par
value (unlimited number of shares
authorized):
Institutional Shares 5,566,947 18,579,344 4,469,514
Service Shares 57,126 60,477 109,662
Institutional Shares: Net asset
value and maximum public offering
price per share (net assets/shares
outstanding) $ 17.83 $ 18.06 $ 26.03
Service Shares: Net asset value per
share (net assets/shares outstand-
ing) $ 17.83 $ 18.06 $ 26.01
Maximum public offering price per
share(a) $ 18.19 $ 18.72 $ 26.95
-------------------------------------------------------------------------------
</TABLE>
(a) For the Short-Term Government Fund, the maximum public offering price per
share is calculated as (NAV per share x 1.0204). For all other Funds, the
maximum public offering price per share is calculated as (NAV per share x
1.0363).
The accompanying notes are an integral part of these financial statements.
40
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
National Missouri
Tax-Free Tax-Free
Growth and MidCap International Intermediate Intermediate
Income Fund Growth Fund Fund Equity Fund Bond Fund Bond Fund
<S> <C> <C> <C> <C> <C>
$73,393,238 $504,548,894 $202,321,048 $181,948,275 $41,015,629 $37,093,120
616 -- 285 846,369 75,666 5,997
-- 3,727,158 -- 202,445 -- --
85,933 130,116 15,929 397,978 639,363 541,529
443,104 338,974 333,172 1,039,382 248,799 --
-- 587 538 530 1,656 1,646
589 4,039 1,367 1,242 418 354
-------------------------------------------------------------------------------------
73,923,480 508,749,768 202,672,339 184,436,221 41,981,531 37,642,646
-------------------------------------------------------------------------------------
-- 910,431 -- -- -- --
144,990 -- 1,058,501 124,412 1,228,763 270,000
678,466 1,557,241 636,978 751,162 -- --
-- -- -- -- 98,729 100,789
43,228 313,749 120,878 142,689 5,322 727
8,649 62,750 24,182 22,940 5,021 4,616
16,990 58,220 7,403 -- -- --
838 19,656 4,276 -- -- --
36,590 128,048 62,996 54,024 19,199 20,502
-------------------------------------------------------------------------------------
929,751 3,050,095 1,915,214 1,095,227 1,357,034 396,634
-------------------------------------------------------------------------------------
69,645,186 317,775,078 129,255,229 143,671,475 41,602,107 38,395,052
19,732 (867,993) (694,623) (205,536) 26,798 27,620
(228,518) 42,598,598 17,119,629 6,267,797 (138,921) (141,998)
3,557,329 146,193,990 55,076,890 33,607,258 (865,487) (1,034,662)
-------------------------------------------------------------------------------------
$72,993,729 $505,699,673 $200,757,125 $183,340,994 $40,624,497 $37,246,012
-------------------------------------------------------------------------------------
3,152,957 12,210,309 4,583,600 6,170,732 2,232,629 2,066,387
40,138 375,811 95,700 27,487 -- --
$ 22.86 $ 40.19 $ 42.91 $ 29.58 $ 18.20 $ 18.02
$ 22.87 $ 39.93 $ 42.47 $ 29.50 -- --
$ 23.70 $ 41.38 $ 44.01 $ 30.57 -- --
-------------------------------------------------------------------------------------
</TABLE>
41
<PAGE>
COMMERCE FUNDS
Statements of Operations
For the Six Months Ended April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Short-Term
Government Balanced
Fund Bond Fund Fund
<S> <C> <C> <C>
Investment Income:
Interest $ 3,504,940 $12,497,215 $ 1,876,707
Dividends(a) -- -- 384,176
-------------------------------------------------------------------------------
Total income 3,504,940 12,497,215 2,260,883
-------------------------------------------------------------------------------
Expenses:
Advisory fees 273,500 874,809 626,051
Administration fees 82,051 262,443 93,908
Shareowner servicing fees 20,191 89,075 79,662
Transfer agent fees 32,858 28,892 33,936
Custodian fees 33,147 46,681 40,287
Professional fees 14,787 40,954 14,787
Registration fees 15,532 23,794 16,793
Trustee fees 1,236 3,532 1,236
Distribution fees -- Service Shares 1,277 1,389 3,471
Amortization of deferred organization
expenses 530 881 541
Other 14,981 35,955 14,627
-------------------------------------------------------------------------------
Total expenses 490,090 1,408,405 925,299
-------------------------------------------------------------------------------
Less -- Investment advisory fees
waived and expense reimbursements (116,850) -- (245,535)
-------------------------------------------------------------------------------
Net expenses 373,240 1,408,405 679,764
-------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 3,131,700 11,088,810 1,581,119
-------------------------------------------------------------------------------
Realized and unrealized gain (loss) on
investment and foreign currency trans-
actions:
Net realized gain (loss) from:
Investment transactions (861,106) (1,027,037) 5,960,488
Foreign currency related transactions -- -- --
Net change in unrealized gain (loss)
on:
Investments (518,433) (7,355,652) 2,481,438
Translation of assets and liabilities
denominated in foreign currencies -- -- --
-------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions (1,379,539) (8,382,689) 8,441,926
-------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 1,752,161 $ 2,706,121 $10,023,045
-------------------------------------------------------------------------------
</TABLE>
(a) Amount is net of $470, $1,190, $6,370 and $115,594 respectively, for the
Balanced, Growth and Income, Growth and International Equity Fund in
withholding taxes.
The accompanying notes are an integral part of these financial statements.
42
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
National Missouri
International Tax-Free Tax-Free
Growth and Growth MidCap Equity Intermediate Intermediate
Income Fund Fund Fund Fund Bond Fund Bond Fund
<S> <C> <C> <C> <C> <C>
$ 25,558 $ 1,476,059 $ 98,066 $ 283,619 $ 958,811 $ 964,406
587,896 322,185 223,957 758,640 -- --
-----------------------------------------------------------------------------------
613,454 1,798,244 322,023 1,042,259 958,811 964,406
-----------------------------------------------------------------------------------
245,592 1,849,123 684,554 1,298,343 97,203 97,672
49,118 369,825 136,911 129,834 29,161 29,301
26,853 194,269 56,570 23,166 -- --
10,996 76,931 55,823 36,824 14,053 15,176
24,706 39,390 28,064 124,754 24,402 24,029
6,930 50,657 16,757 15,773 4,928 5,127
11,630 23,759 15,599 16,902 3,378 3,146
823 4,528 1,400 1,317 411 427
1,140 18,534 4,804 862 -- --
-- 573 526 522 1,631 1,628
2,765 38,648 15,638 10,711 8,110 7,764
-----------------------------------------------------------------------------------
380,553 2,666,237 1,016,646 1,659,008 183,277 184,270
-----------------------------------------------------------------------------------
-- -- -- (488,211) (47,193) (57,297)
-----------------------------------------------------------------------------------
380,553 2,666,237 1,016,646 1,170,797 136,084 126,973
-----------------------------------------------------------------------------------
232,901 (867,993) (694,623) (128,538) 822,727 837,433
-----------------------------------------------------------------------------------
3,594,585 42,599,454 17,182,027 6,248,970 (138,767) (141,947)
-- -- -- 76,158 -- --
598,114 32,796,755 21,454,060 11,674,118 62,135 36,029
-- -- -- (9,818) -- --
-----------------------------------------------------------------------------------
4,192,699 75,396,209 38,636,087 17,989,428 (76,632) (105,918)
-----------------------------------------------------------------------------------
$4,425,600 $74,528,216 $37,941,464 $17,860,890 $ 746,095 $ 731,515
-----------------------------------------------------------------------------------
</TABLE>
43
<PAGE>
COMMERCE FUNDS
Statements of Changes in Net Assets
For the Six Months Ended April 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Short-Term
Government Balanced
Fund Bond Fund Fund
<S> <C> <C> <C>
From operations:
Net investment income (loss) $ 3,131,700 $ 11,088,810 $ 1,581,119
Net realized gain (loss) on
investments and foreign currency
related transactions (861,106) (1,027,037) 5,960,488
Net change in unrealized gain
(loss) on investments and
translation of assets and
liabilities denominated in foreign
currencies (518,433) (7,355,652) 2,481,438
------------------------------------------------------------------------------
Net Increase in net assets
resulting from operations 1,752,161 2,706,121 10,023,045
------------------------------------------------------------------------------
zDistributions to Shareholders:
From net investment income
Institutional Shares (3,151,386) (11,498,522) (1,654,761)
Service Shares (28,382) (35,223) (33,515)
From net realized gain on
investment transactions
Institutional Shares -- (865,117) (4,484,147)
Service Shares -- (2,859) (99,499)
------------------------------------------------------------------------------
Total distributions to
shareholders (3,179,768) (12,401,721) (6,271,922)
------------------------------------------------------------------------------
From share transactions:
Proceeds from sale of shares 22,950,666 48,979,088 12,041,030
Reinvestment of dividends and
distributions 1,953,447 7,964,624 6,191,330
Cost of shares redeemed (40,401,999) (85,930,855) (29,747,735)
------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from share
transactions (15,497,886) (28,987,143) (11,515,375)
------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) (16,925,493) (38,682,743) (7,764,252)
------------------------------------------------------------------------------
Net assets:
Beginning of period 117,184,927 375,301,095 126,980,290
------------------------------------------------------------------------------
End of period $100,259,434 $336,618,352 $119,216,038
------------------------------------------------------------------------------
Accumulated undistributed
(distribution in excess of) net
investment income (loss) $ 7,351 $ 2,797 $ 369,203
------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
44
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
National Missouri
Tax-Free Tax-Free
Growth and MidCap International Intermediate Intermediate
Income Fund Growth Fund Fund Equity Fund Bond Fund Bond Fund
<S> <C> <C> <C> <C> <C>
$ 232,901 $ (867,993) $ (694,623) $ (128,538) $ 822,727 $ 837,433
3,594,585 42,599,454 17,182,027 6,325,128 (138,767) (141,947)
598,114 32,796,755 21,454,060 11,664,300 62,135 36,029
---------------------------------------------------------------------------------------
4,425,600 74,528,216 37,941,464 17,860,890 746,095 731,515
---------------------------------------------------------------------------------------
(237,339) -- -- (356,026) (822,727) (837,748)
(2,221) -- -- -- -- --
-- (46,852,787) (22,788,341) (6,663,121) (21,523) (5,121)
-- (1,491,603) (520,840) (24,299) -- --
---------------------------------------------------------------------------------------
(239,560) (48,344,390) (23,309,181) (7,043,446) (844,250) (842,869)
---------------------------------------------------------------------------------------
22,835,092 93,315,130 63,327,265 67,420,292 7,412,126 4,018,662
153,603 41,898,348 17,643,572 5,221,782 251,539 219,428
(29,760,786) (116,088,828) (42,122,185) (28,635,456) (7,183,545) (9,522,072)
---------------------------------------------------------------------------------------
(6,772,091) 19,124,650 38,848,652 44,006,618 480,120 (5,283,982)
---------------------------------------------------------------------------------------
(2,586,051) 45,308,476 53,480,935 54,824,062 381,965 (5,395,336)
---------------------------------------------------------------------------------------
75,579,780 460,391,197 147,276,190 128,516,932 40,242,532 42,641,348
---------------------------------------------------------------------------------------
$72,993,729 $505,699,673 $200,757,125 $183,340,994 $40,624,497 $37,246,012
---------------------------------------------------------------------------------------
$ 19,732 $ (867,993) $ (694,623) $ (205,536) $ 26,798 $ 27,620
---------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
COMMERCE FUNDS
Statements of Changes in Net Assets
For the Year Ended October 31, 1999
<TABLE>
<CAPTION>
Short-Term
Government Balanced
Fund Bond Fund Fund
<S> <C> <C> <C>
From operations:
Net investment income (loss) $ 5,588,879 $ 21,388,651 $ 3,593,919
Net realized gain (loss) on
investments and foreign currency
related transactions (7,178) 1,193,228 4,617,346
Net change in unrealized gain
(loss) on investments and
translation of assets and
liabilities denominated in foreign
currencies (3,616,622) (21,271,439) 1,416,483
------------------------------------------------------------------------------
Net Increase (decrease) in net
assets resulting from operations 1,965,079 1,310,440 9,627,748
------------------------------------------------------------------------------
Distributions to Shareholders:
From net investment income
Institutional Shares (5,506,354) (21,322,484) (3,446,941)
Service Shares (55,661) (65,548) (69,451)
From net realized gain on
investment transactions
Institutional Shares (47,999) (3,616,243) (13,708,760)
Service Shares (693) (12,411) (298,062)
------------------------------------------------------------------------------
Total distributions to
shareholders (5,610,707) (25,016,686) (17,523,214)
------------------------------------------------------------------------------
From share transactions:
Proceeds from sale of shares 99,593,163 163,869,981 33,364,727
Reinvestment of dividends and
distributions 3,659,370 16,796,721 17,475,887
Cost of shares redeemed (52,927,680) (88,113,992) (42,276,072)
------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from share
transactions 50,324,853 92,552,710 8,564,542
------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) 46,679,225 68,846,464 669,076
------------------------------------------------------------------------------
Net assets:
Beginning of year 70,505,702 306,454,631 126,311,214
------------------------------------------------------------------------------
End of year $117,184,927 $375,301,095 $126,980,290
------------------------------------------------------------------------------
Accumulated undistributed net
investment income $ 55,419 $ 447,732 $ 476,360
------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
46
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
National Missouri
Tax-Free Tax-Free
Growth and MidCap International Intermediate Intermediate
Income Fund Growth Fund Fund Equity Fund Bond Fund Bond Fund
<S> <C> <C> <C> <C> <C>
$ 576,112 $ (610,986) $ (936,785) $ 433,881 $ 1,509,578 $ 1,563,315
(3,794,493) 48,947,726 23,720,190 8,196,242 21,369 5,120
4,583,016 30,096,197 14,562,053 11,122,600 (2,046,587) (2,061,534)
-----------------------------------------------------------------------------------------
1,364,635 78,432,937 37,345,458 19,752,723 (515,640) (493,099)
-----------------------------------------------------------------------------------------
(573,720) (151,250) -- (447,364) (1,509,578) (1,563,355)
(4,883) -- -- (952) -- --
(1,000,492) (60,788,010) (7,035,654) -- (282,626) (185,341)
(14,161) (1,370,831) (63,725) -- -- --
-----------------------------------------------------------------------------------------
(1,593,256) (62,310,091) (7,099,379) (448,316) (1,792,204) (1,748,696)
-----------------------------------------------------------------------------------------
31,324,695 164,584,725 42,483,286 48,107,117 16,441,369 21,667,860
1,053,891 53,058,451 5,038,648 303,849 316,392 355,572
(50,560,491) (192,136,802) (70,763,234) (40,738,397) (7,735,169) (11,191,281)
-----------------------------------------------------------------------------------------
(18,181,905) 25,506,374 (23,241,300) 7,672,569 9,022,592 10,832,151
-----------------------------------------------------------------------------------------
(18,410,526) 41,629,220 7,004,779 26,976,976 6,714,748 8,590,356
-----------------------------------------------------------------------------------------
93,990,306 418,761,977 140,271,411 101,539,956 33,527,784 34,050,992
-----------------------------------------------------------------------------------------
$ 75,579,780 $ 460,391,197 $147,276,190 $128,516,932 $40,242,532 $ 42,641,348
-----------------------------------------------------------------------------------------
$ 26,391 $ -- $ -- $ 279,028 $ 26,798 $ 27,935
-----------------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
COMMERCE FUNDS
Notes to Financial Statements
April 30, 2000 (Unaudited)
1. ORGANIZATION
The Commerce Funds (the "Trust") is a Delaware business trust registered un-
der the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end, management investment company. The Trust consists of nine portfo-
lios (individually, a "Fund" and collectively, the "Funds"): Short-Term Gov-
ernment Fund, Bond Fund, Balanced Fund, Growth and Income Fund, Growth Fund,
MidCap Fund, International Equity Fund, National Tax-Free Intermediate Bond
Fund and Missouri Tax-Free Intermediate Bond Fund (formerly National Tax-Free
Bond Fund and Missouri Tax-Free Bond Fund, respectively). Each of the Funds
offers two classes of shares, Institutional Shares and Service Shares (except
National Tax-Free Intermediate Bond Fund and Missouri Tax-Free Intermediate
Bond Fund which only offer Institutional Shares). Each Fund is registered as
a diversified management investment company, other than the Missouri Tax-Free
Intermediate Bond Fund, which is registered as non-diversified under the 1940
Act.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make es-
timates and assumptions that may affect the reported amounts.
A. Investment Valuation -- Investments in securities traded on a U.S. or for-
eign securities exchange or the NASDAQ system are valued daily at their last
sale price on the principal exchange on which they are traded. If no sale oc-
curs, securities are valued at the last bid price. Debt securities are valued
at prices supplied by an independent pricing service, broker / dealer-sup-
plied valuations or matrix pricing systems. Unlisted equity and debt securi-
ties for which market quotations are available are valued at the last sale
price on valuation date, or if no sale occurs, at the last bid price. Short-
term debt obligations maturing in sixty days or less are valued at amortized
cost. Securities for which quotations are not readily available are valued at
fair value using methods approved by the Trust's Board of Trustees.
Investing in emerging markets may involve special risks and considerations
not typically associated with investing in the United States. These risks in-
clude revaluation of currencies, high rates of inflation, repatriation re-
strictions on income and capital, and adverse political and economic
developments. Moreover, securities issued in these markets may be less liq-
uid, may be subject to government ownership controls and delayed settlements,
and their prices may be more volatile than those of comparable securities in
the United States.
B. Security Transactions and Dividend Income -- Security transactions are re-
corded as of the trade date. Realized gains and losses on sales of portfolio
securities are calculated using the identified-cost basis. Dividend income is
recorded on the ex-dividend date. Dividends for which a Fund has the choice
to receive either cash or stock are recognized as investment income in an
amount equal to the cash dividend.
C. Premiums and Discounts on Debt Securities Owned -- The National Tax-Free
Intermediate Bond and the Missouri Tax-Free Intermediate Bond Funds amortize
premiums on debt securities on the effective yield basis, and do not accrete
market discounts on debt securities. The Growth, MidCap and International Eq-
uity Funds accrete market discounts and amortize premiums on a yield to matu-
rity basis. The Short-Term Government, Bond, Balanced and Growth and Income
Funds do not accrete market discounts or amortize premiums on long-term debt
securities.
48
<PAGE>
COMMERCE FUNDS
The Short-Term Government, Bond and Balanced Funds invest in mortgage-
backed securities. Certain mortgage security paydown gains and losses are
taxable as ordinary income. Such paydown gains and losses increase or de-
crease taxable ordinary income available for distribution and are classified
as interest income in the accompanying Statements of Operations. For all
Funds, original issue discounts ("OID") on debt securities are amortized to
interest income over the life of the security with a corresponding increase
in the cost basis of that security. OID amortization on mortgage backed REMIC
securities is initially recorded based on estimates of principal paydowns us-
ing the most recent OID factors available from the issuer. Recorded amortiza-
tion amounts are adjusted when actual OID factors are received.
D. Foreign Currency Translations -- The books and records of the Funds are
maintained in U.S. dollars. Amounts denominated in foreign currencies are
translated into U.S. dollars on the following basis: (i) investment valua-
tions, foreign currency and other assets and liabilities initially expressed
in foreign currencies are converted each business day into U.S. dollars based
on current exchange rates; and (ii) purchases and sales of foreign invest-
ments, income and expenses are converted into U.S. dollars based upon cur-
rency exchange rates prevailing on the respective dates of such transactions.
Net realized gain (loss) on foreign currency transactions represent: (i)
foreign exchange gains and losses from the sale of foreign currencies; (ii)
foreign exchange gains and losses between trade date and settlement date on
investment securities transactions and foreign exchange contracts; and (iii)
foreign exchange gains and losses from the difference between amounts of div-
idends and interest recorded and the amounts actually received. Net
unrealized gain (loss) on translation of assets and liabilities denominated
in foreign currencies arises from changes in the value of assets and liabili-
ties.
E. Forward Foreign Currency Exchange Contracts -- The International Equity
Fund may enter into forward foreign currency exchange contracts for the pur-
chase of a specific foreign currency at a fixed price on a future date as a
hedge or cross-hedge against either specific transactions or portfolio posi-
tions. The Fund may also purchase and sell forward contracts to seek to in-
crease total return. All commitments are "marked-to-market" daily at the
applicable translation rates. The Fund realizes gains or losses at the time a
forward contract is offset by entry into a closing transaction or extin-
guished by delivery of the currency. Risks may arise upon entering into these
contracts from the potential inability of counterparties to meet the terms of
their contracts and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
F. Segregation Transactions -- The Funds may enter into certain derivative
transactions to seek to increase total return. Forward foreign currency ex-
change contracts, futures contracts, written options, when-issued securities
and forward commitments represent examples of such transactions. As a result
of entering into these transactions, the Funds are required to segregate liq-
uid assets on the accounting records equal to or greater than the market
value of the corresponding transactions.
G. Repurchase Agreements -- During the term of a repurchase agreement, the
value of the underlying securities, including accrued interest, is required
to equal or exceed the value of the repurchase agreement. The underlying se-
curities for all repurchase agreements are held in safekeeping in the custom-
er-only account, at the Funds' custodian, or at sub-custodians.
49
<PAGE>
COMMERCE FUNDS
Notes to Financial Statements (continued)
April 30, 2000 (Unaudited)
H. Dividend Distributions to Shareholders -- Dividends from net investment
income are declared daily and paid monthly by the Short-Term Government,
Bond, National Tax-Free Intermediate Bond and Missouri Tax-Free Intermediate
Bond Funds; declared and paid quarterly by the Balanced and Growth and Income
Funds; and declared and paid annually by the MidCap, Growth and International
Equity Funds. Each Fund's net realized capital gains (including net short-
term capital gains), if any, are declared and distributed at least annually.
Distributions to shareholders are recorded on the ex-dividend date.
I. Deferred Organization Expenses -- Organization costs are being amortized
on a straight-line basis over a period of five years beginning with the com-
mencement of each Fund's operations.
J. Expenses -- Expenses incurred by the Trust that do not specifically relate
to an individual Fund of the Trust are allocated to the Funds based on each
Fund's relative average daily net assets for the period. Service Class share-
holders bear all expenses and fees relating to the Distribution Plan.
K. Federal Taxes -- It is each Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute each year substantially all of its investment company tax-ex-
empt and taxable income and capital gains to its shareholders. Accordingly,
no federal tax provisions are required.
The characterization of distributions to shareholders for financial report-
ing purposes is determined in accordance with income tax rules. Therefore,
the source of a portfolio's distributions may be shown in the accompanying
financial statements as either from or in excess of net investment income or
net realized gain on investment transactions, or from paid-in capital, de-
pending on the type of book/tax differences that may exist as well as timing
differences associated with having different book and tax year ends.
As of the Trust's most recent tax year-end, the Short-Term Government and
Growth and Income Funds had capital loss carryforwards for U.S. federal in-
come tax purposes. These amounts are available to be carried forward to off-
set future capital gains of the Funds to the extent permitted by applicable
laws or regulations.
<TABLE>
<CAPTION>
Fund Amount Year of Expiration
----------------------------------------------------------------------------------------
<S> <C> <C>
Short-Term Government $ 7,232 2007
----------------------------------------------------------------------------------------
Growth and Income 3,823,103 2007
----------------------------------------------------------------------------------------
</TABLE>
50
<PAGE>
COMMERCE FUNDS
At April 30, 2000, the Fund's aggregate cost of portfolio securities, gross
unrealized gain on investments and gross unrealized loss on investments for
federal income tax purposes are as follows:
<TABLE>
<CAPTION>
Net
Gross Gross Unrealized
Fund Tax Cost Unrealized Gain Unrealized Loss Gain (Loss)
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Government $102,805,173 $ 91,343 $ (2,711,313) $ (2,619,970)
--------------------------------------------------------------------------------------
Bond 353,497,392 1,544,589 (18,993,553) (17,448,964)
--------------------------------------------------------------------------------------
Balanced 103,427,725 19,625,496 (5,395,423) 14,230,073
--------------------------------------------------------------------------------------
Growth and Income 69,835,909 7,667,166 (4,109,837) 3,557,329
--------------------------------------------------------------------------------------
Growth 358,354,904 165,598,195 (19,404,205) 146,193,990
--------------------------------------------------------------------------------------
MidCap 147,306,336 62,622,194 (7,607,482) 55,014,712
--------------------------------------------------------------------------------------
International Equity 148,450,777 39,817,261 (6,319,763) 33,497,498
--------------------------------------------------------------------------------------
National Tax-Free Inter-
mediate Bond 41,881,116 150,951 (1,016,438) (865,487)
--------------------------------------------------------------------------------------
Missouri Tax-Free Inter-
mediate Bond 38,127,782 88,180 (1,122,842) (1,034,662)
--------------------------------------------------------------------------------------
</TABLE>
3. AGREEMENTS
The Funds have entered into an Advisory Agreement with Commerce Bank, N.A.
(the "Advisor"). Pursuant to the terms of the Advisory Agreement, the Advisor
is responsible for managing the investments and making investment decisions
for each of the Funds. For these services and for assuming related expenses,
the Advisor is entitled to a fee, computed daily and payable monthly, at the
contractual annual rate of the corresponding Fund's average daily net assets.
For the six months ended April 30, 2000, the Advisor had contractually agreed
to waive a portion of its advisory fee for certain portfolios. The contrac-
tual annual rate, actual annual rate and waiver amount are listed below.
<TABLE>
<CAPTION>
Waiver
Contractual Actual --------------
Fund Annual Rate Annual Rate Rate Amount
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Government 0.50% 0.30% 0.20% $109,399
----------------------------------------------------------------------------
Bond 0.50 0.50 -- --
----------------------------------------------------------------------------
Balanced 1.00 0.70 0.30 187,815
----------------------------------------------------------------------------
Growth and Income 0.75 0.75 -- --
----------------------------------------------------------------------------
Growth 0.75 0.75 -- --
----------------------------------------------------------------------------
MidCap 0.75 0.75 -- --
----------------------------------------------------------------------------
International Equity 1.50 0.94 0.56 488,211
----------------------------------------------------------------------------
National Tax-Free Intermediate Bond 0.50 0.35 0.15 29,161
----------------------------------------------------------------------------
Missouri Tax-Free Intermediate Bond 0.50 0.30 0.20 39,069
----------------------------------------------------------------------------
</TABLE>
As authorized by the Advisory Agreement, the Advisor has entered into a
Sub-Advisory Agreement with Rowe Price-Fleming International, Inc. (the "Sub-
Advisor") whereby the Sub-Advisor manages the investment assets of the Inter-
national Equity Fund. As compensation for services rendered under the Sub-
Advisory Agreement, the Sub-Advisor is entitled to a fee from the Advisor at
the following annual rate:
<TABLE>
<CAPTION>
Average Daily Net
Assets Annual Rate
----------------------------
<S> <C>
First $20 million .75%
----------------------------
Next $30 million .60
----------------------------
Over $50 million .50
----------------------------
</TABLE>
51
<PAGE>
COMMERCE FUNDS
Notes to Financial Statements (continued)
April 30, 2000 (Unaudited)
In addition, when the International Equity Fund's average net assets reach
$200 million, the Sub-Advisor has agreed to waive fees in excess of 0.50% of
the average daily net assets of the Fund.
In addition, for the six months ended April 30, 2000, the Advisor has vol-
untarily agreed to reimburse expenses (excluding interest, taxes, service
share distribution expenses and extraordinary expenses) to the extent that
such expenses exceed, on an annualized basis, .68%, .88%, 1.20%, 1.13%,
1.72%, .70% and .65% of average net assets of the Short-Term Government,
Bond, Growth and Income, Growth, International Equity, National Tax-Free In-
termediate Bond Fund and Missouri Tax-Free Intermediate Bond Funds, respec-
tively. Effective March 1, 2000, the Advisor has voluntarily agreed to
reimburse expenses (excluding interest, taxes, service share distribution ex-
penses and extraordinary expenses) for the Balanced Fund to the extent that
such expenses exceed, on an annualized basis 1.03% of average net assets.
Prior thereto, the expense limitation was 1.13% of average net assets. The
effect of these reimbursements by the Advisor for the six months ended April
30, 2000, was to reduce expenses by $7,451, $57,720, $18,032 and $18,228 for
the Short-Term Government, Balanced, National Tax-Free Intermediate Bond and
Missouri Tax-Free Intermediate Bond Funds, respectively. The amount reimburs-
able to the Short-Term Government, Balanced, National Tax-Free Intermediate
Bond and Missouri Tax-Free Intermediate Bond Funds at April 30, 2000, was
$4,983, $8,260, $6,392 and $8,506 respectively, and are netted in "Advisory
fees payable" in the accompanying Statements of Assets and Liabilities.
As of September 1, 1999, Goldman, Sachs & Co. established a new operating
division named the Investment Management Division. This newly created entity
includes Goldman Sachs Asset Management ("GSAM"). GSAM serves as the Trust's
administrator, pursuant to an Administration Agreement. Under the Administra-
tion Agreement, GSAM administers the Trust's business affairs. As compensa-
tion for the services rendered under the Administration Agreement and its
assumption of related expenses, GSAM is entitled to a fee, computed daily and
payable monthly, at an annual rate of .15% of the average daily net assets of
each Fund.
Goldman Sachs & Co. serves as Distributor of shares of the Funds pursuant
to a Distribution Agreement and may receive a portion of the sales charge im-
posed on the sale of shares of the Funds. The maximum sales charge imposed on
the sale of Service Shares of the Short-Term Government Fund is 2.00%; for
all other Funds' Service Shares, the maximum sales charge is 3.50%. Goldman
Sachs & Co. has advised the Trust that it has retained approximately $5,000
on the sale of shares of the Funds for the six months ended April 30, 2000.
The Trust, on behalf of each Fund (except the National Tax-Free Intermedi-
ate Bond Fund and Missouri Tax-Free Intermediate Bond Fund), has adopted a
Distribution Plan for Service Shares pursuant to Rule 12b-1 under the 1940
Act. Under the distribution plan, payments by each Fund for distribution ex-
penses may not exceed .25% (annualized) of the average daily net assets of
the Fund's Service Shares.
Pursuant to a Shareholder Administrative Services Plan adopted by its Board
of Trustees, the Funds may enter into agreements with service organizations,
such as banks and financial institutions, which may include the Advisor and
its affiliates ("Service Organizations"), under which they will render share-
holder administration support services. For these services, the Service Orga-
nizations are entitled to receive fees from a Fund at an annual rate of up to
.25% of the average daily net asset value of Fund shares beneficially owned
by clients of such Service Organizations.
52
<PAGE>
COMMERCE FUNDS
4. INVESTMENT TRANSACTIONS
Purchases and proceeds of sales or maturities of long-term securities for the
six months ended April 30, 2000, were as follows:
<TABLE>
<CAPTION>
Purchases Sales or
Purchase of (excluding maturities of Sales or maturities
U.S. Government U.S. Government U.S. Government (excluding
and agency and agency and agency U.S. Government and
obligations obligations) obligations agency obligations)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Government
Fund $28,058,334 $ 7,094,995 $22,601,504 $ 8,745,563
----------------------------------------------------------------------------------------------
Bond Fund 33,251,963 24,036,654 54,323,566 19,265,692
----------------------------------------------------------------------------------------------
Balanced Fund 28,274,901 25,272,526 47,243,955 35,259,094
----------------------------------------------------------------------------------------------
Growth and Income Fund -- 27,878,331 -- 34,795,070
----------------------------------------------------------------------------------------------
Growth Fund -- 111,495,593 -- 119,811,197
----------------------------------------------------------------------------------------------
MidCap Fund -- 105,703,523 -- 83,876,720
----------------------------------------------------------------------------------------------
International Equity
Fund -- 83,259,232 -- 42,699,324
----------------------------------------------------------------------------------------------
National Tax-Free Inter-
mediate Bond Fund -- 8,155,228 -- 7,871,459
----------------------------------------------------------------------------------------------
Missouri Tax-Free Inter-
mediate Bond Fund -- 6,274,678 -- 9,799,183
----------------------------------------------------------------------------------------------
</TABLE>
5. CONCENTRATION OF RISK
Under normal conditions, the Missouri Tax-Free Intermediate Bond and Na-
tional Tax-Free Intermediate Bond Funds will invest at least 80% of their net
assets in tax-exempt securities. Although they do not expect to do so, the
Funds may invest up to 20% of their net assets in private activity bonds that
may subject certain investors to the federal alternative minimum tax.
In addition, the Missouri Tax-Free Intermediate Bond Fund invests
substantially all of its assets in debt obligations of issuers located in the
State of Missouri. The National Tax-Free Intermediate Bond Fund invests
substantially all of its assets in debt securities issued by or on behalf of
states, territories and possessions of the U.S. The issuers' abilities to
meet their obligations may be affected by the states' economic and political
developments.
The International Equity Fund invests a portion of its assets in emerging
markets. Emerging markets securities are volatile. They are subject to sub-
stantial currency fluctuations and sudden economic and political develop-
ments. At times, the securities held by the International Equity Fund may be
subject to abrupt and severe price declines.
53
<PAGE>
COMMERCE FUNDS
Notes to Financial Statements (continued)
April 30, 2000 (Unaudited)
6. SUMMARY OF SHARE TRANSACTIONS
Share activity is as follows:
<TABLE>
<CAPTION>
Short-
Term Government Fund Bond Fund
------------------------ ------------------------
Shares Dollars Shares Dollars
For the Six Months Ended April 30, 2000 (Unaudited)
<S> <C> <C> <C> <C>
Institutional Shares
Shares sold 1,274,419 $ 22,868,830 2,672,953 $ 48,925,491
Reinvestment of dividends
and distributions 108,226 1,937,701 434,555 7,929,907
Shares repurchased (2,247,558) (40,314,313) (4,679,327) (85,786,413)
-----------------------------------------------
(864,913) (15,507,782) (1,571,819) (28,931,015)
------------------------------------------------------------------------------
Service Shares
Shares sold 4,572 81,836 2,921 53,597
Reinvestment of dividends
and distributions 880 15,746 1,902 34,717
Shares repurchased (4,903) (87,686) (7,917) (144,442)
-----------------------------------------------
549 9,896 (3,094) (56,128)
------------------------------------------------------------------------------
NET INCREASE (DECREASE) (864,364) $(15,497,886) (1,574,913) $(28,987,143)
------------------------------------------------------------------------------
For the Year Ended October 31, 1999
Institutional Shares
Shares sold 5,324,843 $ 97,584,178 8,522,605 $163,524,792
Reinvestment of dividends
and distributions 198,345 3,625,923 873,736 16,727,317
Shares repurchased (2,793,935) (50,976,935) (4,634,455) (87,897,150)
-----------------------------------------------
2,729,253 50,233,166 4,761,886 92,354,959
------------------------------------------------------------------------------
Service Shares
Shares sold 108,982 2,008,985 18,010 345,189
Reinvestment of dividends
and distributions 1,825 33,447 3,621 69,404
Shares repurchased (105,731) (1,950,745) (11,402) (216,842)
-----------------------------------------------
5,076 91,687 10,229 197,751
------------------------------------------------------------------------------
NET INCREASE (DECREASE) 2,734,329 $ 50,324,853 4,772,115 $ 92,552,710
------------------------------------------------------------------------------
</TABLE>
54
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
Balanced Fund Growth and Income Fund Growth Fund
------------------------- ------------------------ -------------------------
Shares Dollars Shares Dollars Shares Dollars
<S> <C> <C> <C> <C> <C>
467,855 $ 11,839,643 1,046,458 $ 22,810,876 2,413,276 $ 92,420,701
240,678 6,064,007 6,989 151,477 1,091,179 40,439,195
(1,152,282) (29,454,121) (1,386,061) (29,606,039) (2,955,220) (113,568,860)
-------------------------------------------------------------------------------
(443,749) (11,550,471) (332,614) (6,643,686) 549,235 19,291,036
-------------------------------------------------------------------------------
8,004 201,387 1,088 24,216 23,710 894,429
5,059 127,323 98 2,126 39,592 1,459,153
(11,657) (293,614) (7,230) (154,747) (67,547) (2,519,968)
-------------------------------------------------------------------------------
1,406 35,096 (6,044) (128,405) (4,245) (166,386)
-------------------------------------------------------------------------------
(442,343) $(11,515,375) (338,658) $ (6,772,091) 544,990 $ 19,124,650
-------------------------------------------------------------------------------
1,256,913 $ 32,435,728 1,413,116 $ 31,187,726 4,120,844 $ 158,670,973
686,412 17,127,136 48,213 1,035,320 1,466,203 51,701,347
(1,605,963) (41,312,525) (2,239,584) (50,030,942) (4,893,060) (190,127,841)
-------------------------------------------------------------------------------
337,362 8,250,339 (778,255) (17,807,896) 693,987 20,244,479
-------------------------------------------------------------------------------
35,703 928,999 6,081 136,969 153,499 5,913,752
13,993 348,751 865 18,571 38,598 1,357,104
(37,465) (963,547) (23,575) (529,549) (52,465) (2,008,961)
-------------------------------------------------------------------------------
12,231 314,203 (16,629) (374,009) 139,632 5,261,895
-------------------------------------------------------------------------------
349,593 $ 8,564,542 (794,884) $(18,181,905) 833,619 $ 25,506,374
-------------------------------------------------------------------------------
</TABLE>
55
<PAGE>
COMMERCE FUNDS
Notes to Financial Statements (continued)
April 30, 2000 (Unaudited)
6. SUMMARY OF SHARE TRANSACTIONS (continued)
<TABLE>
<CAPTION>
MidCap Fund
------------------
Shares Dollars
For the Six Months Ended April 30, 2000 (Unaudited)
<S> <C> <C>
Institutional Shares
Shares sold 1,522,143 $ 62,586,620
Reinvestment of dividends and distributions 455,290 17,132,572
Shares repurchased (984,645) (41,301,136)
------------------
992,788 38,418,056
----------------------------------------------------------------------
Service Shares
Shares sold 17,793 740,645
Reinvestment of dividends and distributions 13,711 511,000
Shares repurchased (20,934) (821,049)
------------------
10,570 430,596
----------------------------------------------------------------------
NET INCREASE (DECREASE) 1,003,358 $ 38,848,652
----------------------------------------------------------------------
For the Year Ended October 31, 1999
Institutional Shares
Shares sold 1,126,851 $ 40,683,097
Reinvestment of dividends and distributions 148,906 4,974,933
Shares repurchased (1,953,751) (70,571,822)
------------------
(677,994) (24,913,792)
----------------------------------------------------------------------
Service Shares
Shares sold 50,321 1,800,189
Reinvestment of dividends and distributions 1,918 63,715
Shares repurchased (5,267) (191,412)
------------------
46,972 1,672,492
----------------------------------------------------------------------
NET INCREASE (DECREASE) (631,022) $(23,241,300)
----------------------------------------------------------------------
</TABLE>
56
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
National Tax-Free Missouri Tax-Free
International Equity Fund Intermediate Bond Fund Intermediate Bond Fund
---------------------------- ----------------------- -----------------------
Shares Dollars Shares Dollars Shares Dollars
<S> <C> <C> <C> <C> <C>
2,276,487 $ 67,128,847 406,686 $ 7,412,126 222,548 $ 4,018,662
183,328 5,198,030 13,818 251,539 12,169 219,428
(962,783) (28,595,240) (393,538) (7,183,545) (528,417) (9,522,072)
-------------------------------------------------------------------------------
1,497,032 43,731,637 26,966 480,120 (293,700) (5,283,982)
-------------------------------------------------------------------------------
9,701 291,445 -- -- -- --
842 23,752 -- -- -- --
(1,341) (40,216) -- -- -- --
-------------------------------------------------------------------------------
9,202 274,981 -- -- -- --
-------------------------------------------------------------------------------
1,506,234 $ 44,006,618 26,966 $ 480,120 (293,700) $ (5,283,982)
-------------------------------------------------------------------------------
1,820,690 $ 46,399,339 867,967 $ 16,441,369 1,155,718 $ 21,667,860
12,621 302,904 16,862 316,392 19,118 355,572
(1,558,848) (39,065,251) (413,480) (7,735,169) (600,753) (11,191,281)
-------------------------------------------------------------------------------
274,463 7,636,992 471,349 9,022,592 574,083 10,832,151
-------------------------------------------------------------------------------
68,876 1,707,778 -- -- -- --
39 945 -- -- -- --
(67,189) (1,673,146) -- -- -- --
-------------------------------------------------------------------------------
1,726 35,577 -- -- -- --
-------------------------------------------------------------------------------
276,189 $ 7,672,569 471,349 $ 9,022,592 574,083 $ 10,832,151
-------------------------------------------------------------------------------
</TABLE>
57
<PAGE>
COMMERCE FUNDS
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Income from Distributions
investment operations(a) to shareholders
------------------------- -------------------
Net asset
value, Net Net realized From net From net
beginning investment and unrealized investment realized
of period income gain (loss) income gains
SHORT-TERM GOVERNMENT FUND
<S> <C> <C> <C> <C> <C>
For the Six Months Ended
April 30, 2000 (Unau-
dited)
Institutional Shares $18.06 $0.51 $(0.22) $(0.52) $ --
Service Shares 18.07 0.49 (0.23) (0.50) --
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1999
Institutional Shares 18.78 1.04 (0.71) (1.04) (0.01)
Service Shares 18.79 1.00 (0.72) (0.99) (0.01)
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1998
Institutional Shares 18.47 1.10 0.32 (1.11) --
Service Shares 18.48 1.06 0.31 (1.06) --
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1997
Institutional Shares 18.43 1.11 0.04 (1.11) --
Service Shares (com-
menced January 2, 1997) 18.37 0.92 0.11 (0.92) --
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1996
Institutional Shares 18.83 1.09 (0.18) (1.09) (0.22)
----------------------------------------------------------------------------------
For the Period Ended
October 31, 1995
Institutional Shares
(commenced December 12,
1994) 18.00 1.06 0.83 (1.06) --
BOND FUND
For the Six Months Ended
April 30, 2000 (Unau-
dited)
Institutional Shares $18.57 $0.58 $(0.45) $(0.60) $(0.04)
Service Shares 18.57 0.56 (0.45) (0.58) (0.04)
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1999
Institutional Shares 19.84 1.16 (1.04) (1.16) (0.23)
Service Shares 19.85 1.11 (1.05) (1.11) (0.23)
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1998
Institutional Shares 19.43 1.15 0.41 (1.15) --
Service Shares 19.43 1.11 0.42 (1.11) --
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1997
Institutional Shares 19.07 1.17 0.39 (1.18) (0.02)
Service Shares (com-
menced January 2, 1997) 19.00 0.94 0.43 (0.94) --
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1996
Institutional Shares 19.61 1.16 (0.28) (1.16) (0.26)
----------------------------------------------------------------------------------
For the Period Ended
October 31, 1995
Institutional Shares
(commenced December 12,
1994) 18.00 1.12 1.61 (1.12) --
----------------------------------------------------------------------------------
</TABLE>
(a) Includes the balancing effect of calculating per share amounts.
(b) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if sales charges were taken
into account.
(c) Annualized.
The accompanying notes are an integral part of these financial statements.
58
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
Ratios assuming no voluntary
waiver of fees or expense limitations
-------------------------------------
Net assets Ratio of Ratio of
Net asset at end of Ratio of net investment Ratio of net investment Portfolio
value, end Total period net expenses to income to expenses to income to turnover
of period return(b) (in 000s) average net assets average net assets average net assets average net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$17.83 1.62% $ 99,241 0.68%(c) 5.73%(c) 0.89%(c) 5.52%(c) 25%
17.83 1.44 1,018 0.93(c) 5.47(c) 1.14(c) 5.26(c) 25
---------------------------------------------------------------------------------------------------------------------------
18.06 1.83 116,163 0.68 5.65 0.92 5.41 10
18.07 1.57 1,022 0.93 5.46 1.17 5.22 10
---------------------------------------------------------------------------------------------------------------------------
18.78 7.94 69,538 0.68 5.90 1.04 5.55 48
18.79 7.67 968 0.93 5.63 1.29 5.28 48
---------------------------------------------------------------------------------------------------------------------------
18.47 6.45 48,840 0.68 6.04 1.11 5.61 36
18.48 5.81 450 0.93(c) 5.64(c) 1.36(c) 5.21(c) 36
---------------------------------------------------------------------------------------------------------------------------
18.43 5.02 33,839 0.68 5.90 1.11 5.47 12
---------------------------------------------------------------------------------------------------------------------------
18.83 10.72 20,211 0.68(c) 6.38(c) 1.14(c) 5.92(c) 158
$18.06 0.74% $335,526 0.80%(c) 6.34%(c) 0.80%(c) 6.34%(c) 10%
18.06 0.62 1,092 1.05(c) 6.09(c) 1.05(c) 6.09(c) 10
---------------------------------------------------------------------------------------------------------------------------
18.57 0.59 374,121 0.81 6.05 0.81 6.05 16
18.57 0.29 1,180 1.06 5.80 1.06 5.80 16
---------------------------------------------------------------------------------------------------------------------------
19.84 8.27 305,396 0.83 5.86 0.83 5.86 30
19.85 8.05 1,059 1.08 5.59 1.08 5.59 30
---------------------------------------------------------------------------------------------------------------------------
19.43 8.50 217,803 0.85 6.14 0.85 6.14 19
19.43 7.48 739 1.10(c) 5.67(c) 1.10(c) 5.67(c) 19
---------------------------------------------------------------------------------------------------------------------------
19.07 4.71 151,205 0.84 6.10 0.84 6.10 31
---------------------------------------------------------------------------------------------------------------------------
19.61 15.59 98,504 0.88(c) 6.64(c) 0.88(c) 6.64(c) 58
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
59
<PAGE>
COMMERCE FUNDS
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Income from Distributions
investment operations(a) to shareholders
------------------------- -------------------
Net asset
value, Net Net realized From net From net
beginning investment and unrealized investment realized
of period income gain (loss) income gains
BALANCED FUND
<S> <C> <C> <C> <C> <C>
For the Six Months Ended
April 30, 2000 (Unau-
dited)
Institutional Class $25.29 $0.32 $ 1.68 $(0.34) $(0.92)
Service Class 25.27 0.28 1.68 (0.30) (0.92)
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1999
Institutional Shares 27.04 0.70 1.22 (0.69) (2.98)
Service Shares 27.01 0.64 1.22 (0.62) (2.98)
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1998
Institutional Shares 26.67 0.59 1.67 (0.59) (1.30)
Service Shares 26.66 0.53 1.65 (0.53) (1.30)
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1997
Institutional Shares 24.00 0.59 3.93 (0.59) (1.26)
Service Shares (com-
menced January 2, 1997) 23.25 0.40 3.42 (0.41) --
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1996
Institutional Shares 22.10 0.54 2.56 (0.54) (0.66)
----------------------------------------------------------------------------------
For the Period Ended Oc-
tober 31, 1995
Institutional Shares
(commenced December 12,
1994) 18.00 0.59 4.06 (0.55) --
GROWTH AND INCOME FUND
For the Six Months Ended
April 30, 2000 (Unau-
dited)
Institutional Class $21.40 $0.08 $ 1.46 $(0.08) $ --
Service Class 21.41 0.06 1.45 (0.05) --
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1999
Institutional Shares 21.72 0.15 (0.09) (0.15) (0.23)
Service Shares 21.73 0.11 (0.11) (0.09) (0.23)
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1998
Institutional Shares 21.82 0.18 (0.05) (0.19) (0.04)
Service Shares 21.81 0.16 (0.09) (0.11) (0.04)
----------------------------------------------------------------------------------
For the Period Ended Oc-
tober 31, 1997
Institutional Shares
(commenced March 3,
1997) 18.00 0.15 3.80 (0.13) --
Service Shares (com-
menced March 3, 1997) 18.00 0.12 3.80 (0.11) --
----------------------------------------------------------------------------------
</TABLE>
(a) Includes the balancing effect of calculating per share amounts.
(b) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if sales charges were taken
into account.
(c) Annualized.
The accompanying notes are an integral part of these financial statements.
60
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
Ratios assuming no voluntary
waiver of fees or expense limitations
-------------------------------------
Net
assets
at end
of Ratio of Ratio of
Net asset period Ratio of net investment Ratio of net investment Portfolio
value, end Total (in net expenses to income to expenses to income to turnover
of period return(b) 000's) average net assets average net assets average net assets average net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$26.03 8.12% $116,363 1.08%(c) 2.53%(c) 1.47%(c) 2.14%(c) 23%
26.01 8.00 2,853 1.33(c) 2.28(c) 1.72(c) 1.89(c) 23
-----------------------------------------------------------------------------------------------------------------------
25.29 7.60 124,245 1.13 2.71 1.49 2.35 11
25.27 7.38 2,735 1.38 2.47 1.74 2.11 11
-----------------------------------------------------------------------------------------------------------------------
27.04 8.68 123,717 1.13 2.20 1.49 1.84 68
27.01 8.36 2,594 1.38 1.99 1.74 1.63 68
-----------------------------------------------------------------------------------------------------------------------
26.67 19.92 105,782 1.13 2.44 1.53 2.04 31
26.66 16.53 1,219 1.38(c) 2.13(c) 1.78(c) 1.73(c) 31
-----------------------------------------------------------------------------------------------------------------------
24.00 14.45 69,880 1.13 2.47 1.45 2.15 58
-----------------------------------------------------------------------------------------------------------------------
22.10 26.14 48,329 1.13(c) 3.28(c) 1.45(c) 2.96(c) 59
$22.86 7.22% $ 72,076 1.16%(c) 0.71%(c) 1.16%(c) 0.71%(c) 42%
22.87 7.08 918 1.41(c) 0.46(c) 1.41(c) 0.46(c) 42
-----------------------------------------------------------------------------------------------------------------------
21.40 0.29 74,591 1.15 0.67 1.15 0.67 64
21.41 0.02 989 1.40 0.42 1.40 0.42 64
-----------------------------------------------------------------------------------------------------------------------
21.72 0.53 92,625 1.16 0.82 1.16 0.82 55
21.73 0.30 1,365 1.41 0.60 1.41 0.60 55
-----------------------------------------------------------------------------------------------------------------------
21.82 22.00 45,173 1.20(c) 1.30(c) 2.02(c) 0.48(c) 5
21.81 21.81 2,588 1.45(c) 1.02(c) 2.27(c) 0.20(c) 5
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
61
<PAGE>
COMMERCE FUNDS
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Income from Distributions
investment operations(a) to shareholders
--------------------------- -------------------
Net asset Net
value, investment Net realized From net From net
beginning income and unrealized investment realized
of period (loss) gain income gains
GROWTH FUND
<S> <C> <C> <C> <C> <C>
For the Six Months Ended
April 30, 2000 (Unau-
dited)
Institutional Shares $38.24 $(0.07) $5.96 $ -- $(3.94)
Service Shares 38.07 (0.12) 5.92 -- (3.94)
------------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1999
Institutional Shares 37.37 (0.05) 6.40 (0.01) (5.47)
Service Shares 37.29 (0.12) 6.37 -- (5.47)
------------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1998
Institutional Shares 34.54 0.07 5.06 (0.06) (2.24)
Service Shares 34.50 (0.01) 5.05 (0.01) (2.24)
------------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1997
Institutional Shares 28.95 0.19 7.51 (0.19) (1.92)
Service Shares (com-
menced January 2, 1997) 28.26 0.09 6.25 (0.10) --
------------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1996
Institutional Shares 24.68 0.19 5.40 (0.19) (1.13)
------------------------------------------------------------------------------------
For the Period Ended
October 31, 1995
Institutional Shares
(commenced December 12,
1994) 18.00 0.15 6.68 (0.15) --
MIDCAP FUND
For the Six Months Ended
April 30, 2000 (Unau-
dited)
Institutional Shares $40.07 $(0.15) $9.01 $ -- $(6.02)
Service Shares 39.75 (0.20) 8.94 -- (6.02)
------------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1999
Institutional Shares 32.57 (0.23)(d) 9.34(d) -- (1.61)
Service Shares 32.40 (0.31)(d) 9.27(d) -- (1.61)
------------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1998
Institutional Shares 33.02 (0.13) 1.48 -- (1.80)
Service Shares 32.94 (0.16) 1.42 -- (1.80)
------------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1997
Institutional Shares 28.06 (0.13) 5.38 -- (0.29)
Service Shares (com-
menced January 2, 1997) 28.64 (0.11) 4.41 -- --
------------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1996
Institutional Shares 25.30 (0.07) 3.51 -- (0.68)
------------------------------------------------------------------------------------
For the Period Ended
October 31, 1995
Institutional Shares
(commenced December 12,
1994) 18.00 (0.04) 7.34 -- --
------------------------------------------------------------------------------------
</TABLE>
(a) Includes the balancing effect of calculating per share amounts.
(b) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if sales charges were taken
into account.
(c) Annualized.
(d) Calculated based on average shares outstanding methodology.
The accompanying notes are an integral part of these financial statements.
62
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
Net
assets
at end
of Ratio of
Net asset period Ratio of net investment Portfolio
value, end Total (in net expenses to income (loss) to turnover
of period return(b) 000's) average net assets average net assets rate
<S> <C> <C> <C> <C> <C>
$40.19 16.29% $490,695 1.07%(c) (0.34)%(c) 23%
39.93 16.11 15,005 1.32(c) (0.59)(c) 23
---------------------------------------------------------------------------------
38.24 18.24 445,923 1.08 (0.12) 35
38.07 17.97 14,468 1.33 (0.36) 35
---------------------------------------------------------------------------------
37.37 15.38 409,797 1.08 0.20 53
37.29 15.10 8,965 1.33 (0.06) 53
---------------------------------------------------------------------------------
34.54 28.12 343,773 1.11 0.60 32
34.50 22.47 5,758 1.36(c) 0.35(c) 32
---------------------------------------------------------------------------------
28.95 23.43 208,908 1.08 0.72 36
---------------------------------------------------------------------------------
24.68 38.06 141,735 1.11(c) 0.81(c) 33
$42.91 24.22% $196,693 1.14%(c) (0.76)%(c) 47%
42.47 24.10 4,064 1.39(c) (1.00)(c) 47
---------------------------------------------------------------------------------
40.07 28.96 143,892 1.14 (0.63) 98
39.75 28.63 3,384 1.39 (0.86) 98
---------------------------------------------------------------------------------
32.57 3.96 139,035 1.16 (0.58) 76
32.40 3.68 1,236 1.41 (0.82) 76
---------------------------------------------------------------------------------
33.02 18.88 112,442 1.23 (0.61) 89
32.94 15.01 658 1.48(c) (0.95)(c) 89
---------------------------------------------------------------------------------
28.06 13.78 74,641 1.22 (0.37) 71
---------------------------------------------------------------------------------
25.30 40.56 41,665 1.32(c) (0.29)(c) 59
---------------------------------------------------------------------------------
</TABLE>
63
<PAGE>
COMMERCE FUNDS
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Income from Distributions
investment operations(a) to shareholders
------------------------- -------------------
Net asset
value, Net Net realized From net From net
beginning investment and unrealized investment realized
of period Income gain income gains
INTERNATIONAL EQUITY FUND
<S> <C> <C> <C> <C> <C>
For the Six Months Ended
April 30, 2000 (Unau-
dited)
Institutional Shares $27.39 $(0.03) $3.57 $(0.06) $(1.29)
Service Shares 27.30 (0.06) 3.55 -- (1.29)
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1999
Institutional Shares 23.00 0.09 4.40 (0.10) --
Service Shares 22.92 0.10 4.34 (0.06) --
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1998
Institutional Shares 22.10 0.10 1.45 (0.08) (0.57)
Service Shares 22.06 0.05 1.44 (0.06) (0.57)
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1997
Institutional Shares 20.96 0.06 1.42 (0.10) (0.24)
Service Shares (com-
menced January 2, 1997) 21.70 0.01 0.35 -- --
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31, 1996
Institutional Shares 18.64 0.11 2.35 (0.07) (0.07)
----------------------------------------------------------------------------------
For the Period Ended
October 31, 1995
Institutional Shares
(commenced December 12,
1994) 18.00 0.12 0.55 (0.03) --
----------------------------------------------------------------------------------
</TABLE>
(a) Includes the balancing effect of calculating per share amounts.
(b) Assumes investment of the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if sales charges were taken
into account.
(c) Annualized.
The accompanying notes are an integral part of these financial statements.
64
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
Ratios assuming no voluntary waiver
of fees or expense limitations
-------------------------------------
Net assets Ratio of Ratio of
Net asset at end of Ratio of net investment Ratio of net investment Portfolio
value, end Total period net expenses to Income to expenses to income (loss) to turnover
of period return(b) (in 000's) average net assets average net assets average net assets average net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$29.58 13.18%(d) $182,530 1.35%(c) (0.15)%(c) 1.91%(c) (0.71)%(c) 27%
29.50 13.02(d) 811 1.60(c) (0.38)(c) 2.16(c) (0.94)(c) 27
---------------------------------------------------------------------------------------------------------------------------
27.39 19.58 128,018 1.53 0.40 2.07 (0.14) 32
27.30 19.39 499 1.78 0.33 2.32 (0.21) 32
---------------------------------------------------------------------------------------------------------------------------
23.00 7.16 101,161 1.62 0.46 2.14 (0.06) 22
22.92 6.88 379 1.87 0.19 2.39 (0.33) 22
---------------------------------------------------------------------------------------------------------------------------
22.10 7.15 78,273 1.72 0.35 2.23 (0.16) 22
22.06 1.66 231 1.97(c) 0.14(c) 2.48(c) (0.37)(c) 22
---------------------------------------------------------------------------------------------------------------------------
20.96 13.25 51,589 1.72 0.74 2.64 (0.18) 21
---------------------------------------------------------------------------------------------------------------------------
18.64 3.73 21,014 1.81(c) 1.06(c) 3.50(c) (0.63)(c) 25
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
65
<PAGE>
COMMERCE FUNDS
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Income from Distributions
investment operations(a) to shareholders
------------------------- -------------------
Net asset
value, Net Net realized From net From net
beginning investment and unrealized investment realized
of period income gain (loss) income gains
NATIONAL TAX-FREE INTERMEDIATE BOND FUND
<S> <C> <C> <C> <C> <C>
For the Six Months Ended
April 30, 2000 (Unau-
dited) $18.24 $0.39 $(0.03) $(0.39) $(0.01)
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31,
1999 19.33 0.74 (0.93) (0.74) (0.16)
1998 18.85 0.74 0.48 (0.74) --
1997 18.46 0.72 0.39 (0.72) --
1996 18.54 0.73 (0.07) (0.73) (0.01)
For the Period Ended Oc-
tober 31, 1995 (com-
menced February 21,
1995) 18.00 0.54 0.54 (0.54) --
MISSOURI TAX-FREE INTERMEDIATE BOND FUND
For the Six Months Ended
April 30, 2000 (Unau-
dited) $18.07 $0.39 $(0.05) $(0.39) $ --
----------------------------------------------------------------------------------
For the Year Ended Octo-
ber 31,
1999 19.07 0.73 (0.90) (0.73) (0.10)
1998 18.61 0.74 0.47 (0.74) (0.01)
1997 18.26 0.76 0.37 (0.76) (0.02)
1996 18.40 0.76 (0.14) (0.76) --
For the Period Ended Oc-
tober 31, 1995 (com-
menced February 21,
1995) 18.00 0.57 0.40 (0.57) --
----------------------------------------------------------------------------------
</TABLE>
(a) Includes the balancing effect of calculating per share amounts.
(b) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if a sales charge were taken
into account.
(c) Annualized.
The accompanying notes are an integral part of these financial statements.
66
<PAGE>
COMMERCE FUNDS
<TABLE>
<CAPTION>
Ratios assuming no voluntary waiver of
fees or expense limitations
--------------------------------------
Net assets Ratio of Ratio of
Net asset at end of Ratio of net investment Ratio of net investment Portfolio
value, end Total period net expenses to income to expenses to income to turnover
of period return(b) (in 000's) average net assets average net assets average net assets average net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$18.20 1.96% $40,624 0.70%(c) 4.23%(c) 0.94%(c) 3.99%(c) 21%
--------------------------------------------------------------------------------------------------------------------------
18.24 (1.08) 40,243 0.70 3.90 0.93 3.67 35
19.33 6.59 33,528 0.74 3.87 1.04 3.57 41
18.85 6.16 25,281 0.85 3.89 1.15 3.59 6
18.46 3.60 17,613 0.85 3.93 1.55 3.23 34
18.54 6.06 10,721 0.85(c) 4.19(c) 1.90(c) 3.14(c) 19
$18.02 1.89% $37,246 0.65%(c) 4.29%(c) 0.94%(c) 4.00%(c) 17%
--------------------------------------------------------------------------------------------------------------------------
18.07 (0.95) 42,641 0.65 3.91 0.92 3.64 21
19.07 6.65 34,051 0.65 3.93 1.03 3.55 34
18.61 6.31 24,434 0.65 4.14 1.21 3.58 13
18.26 3.43 17,034 0.65 4.14 1.58 3.21 49
18.40 5.45 8,889 0.65(c) 4.41(c) 2.12(c) 2.94(c) 52
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
67
<PAGE>
The Commerce Funds
Trustees
J. Eric Helsing, Chairman
Randall D. Barron
David L. Bodde
John J. Holland
Warren Weaver
Officers
Warren Weaver, President
James A. McNamara, Vice President
Nancy L. Mucker, Vice President
John M. Perlowski, Vice President
Randall D. Barron, Treasurer
Philip V. Giuca Jr., Assistant Treasurer
W. Bruce McConnel III, Secretary
Michael J. Richman, Assistant Secretary
Howard B. Surloff, Assistant Secretary
This Semiannual Report contains facts concerning The Commerce Funds' objectives
and policies, management, expenses, and other information. For more complete
information about The Commerce Funds, a prospectus may be obtained by calling
1-800-995-6365. An investor should read the prospectus carefully before
investing or sending money.
Shares of the Funds are not deposits or obligations of, or guaranteed, endorsed,
or otherwise supported by Commerce Bank, N.A., its parent, or affiliates, and
the shares are not federally insured or guaranteed by the U.S. Government, the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
governmental agency. An investment in the Funds involves investment risks
including the possible loss of the principal amount invested. The Commerce Funds
are advised by Commerce Bank, N.A., which receives a fee for its services. The
Commerce Funds are distributed by Goldman, Sachs & Co.
<PAGE>
INVESTMENT ADVISOR
Commerce Bank, N.A.
INVESTMENT SUB-ADVISOR,
INTERNATIONAL EQUITY FUND
Rowe Price-Fleming International, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
CUSTODIAN
State Street Bank & Trust Company
225 Franklin Street
Boston, Massachusetts 02110
TRANSFER AGENT
National Financial Data Services, Inc.
330 W. 9th
4th Floor
Kansas City, Missouri 64105
DISTRIBUTOR
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
ADMINISTRATOR
Goldman Sachs Asset Management
32 Old Slip
New York, New York 10005
INDEPENDENT AUDITORS
KPMG LLP
1000 Walnut Street
Kansas City, Missouri 64106
LEGAL COUNSEL
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103-6996
[LOGO OF COMMERCE FUNDS]
8000 Forsyth Boulevard
Suite 606
St. Louis, Missouri 63105
1000 Walnut Street
Eighth Floor
Kansas City, Missouri 64106
www.commercefunds.com
1-800-995-6365
CB 5026
Date of first use: 6/28/00
