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THE COMMERCE FUNDS
The MidCap Fund
The Growth Fund
The Growth and Income Fund
The International Equity Fund
The Balanced Fund
The Short-Term Government Fund
The Bond Fund
The National Tax-Free Intermediate Bond Fund
The Missouri Tax-Free Intermediate Bond Fund
Supplement dated August 14, 2000
to Service Shares and Institutional Shares Prospectuses
dated March 1, 2000
The disclosure relating to the MidCap, Growth and Growth and Income Funds is
amended to reflect the following changes:
1. MidCap Fund:
. The name of the Fund is changed to the MidCap Growth Fund.
. The Russell Midcap Growth Index will replace the S&P Mid-Cap 400 Index as the
Fund's benchmark. The Fund is making this change because the Russell Midcap
Growth Index contains securities that are more comparable to those held in
the Fund's portfolio. The average annual total returns of the Service Share
and Institutional Share Classes of the Fund versus the Russell Midcap Growth
Index and the S&P Mid-Cap 400 Index as of 12/31/99 are as follows:
<TABLE>
<CAPTION>
Since Since
Inception Inception
1 Year 3 Years 5 Years (1/2/97) (12/12/94)
<S> <C> <C> <C> <C> <C>
MidCap Growth Fund
Service Shares 25.56% N/A N/A 20.86% N/A
Institutional Shares 25.84% 21.17% 22.64% N/A 23.72%
Russell Midcap Growth Index* 51.30% 29.77% 28.03% 29.83% 28.03%
S&P Mid-Cap 400 Index** 14.73% 21.81% 23.04% 21.83% 23.78%
</TABLE>
* The Russell Midcap Growth Index measures the performance of those Russell
Midcap companies with higher price-to-book ratios and higher forecasted
growth values. The Index figures do not reflect any fees or expenses.
** The S&P Mid-Cap 400 Index is a capitalization-weighted index that measures
the performance of the mid-range sector of the U.S. stock market. The Index
figures do not reflect any fees or expenses.
. The second and third paragraphs under the Fund's primary investment
strategies are deleted and replaced with the following:
. Generally invests in stocks of companies with medium-sized market
capitalizations comparable to those included in the Russell Midcap Growth
Index. Currently, the size
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of those companies is generally below $20 billion. The Adviser believes that
these companies have the capacity for above-average earnings growth. The Fund
invests in companies in anticipation of capital gains only, without
consideration of dividends.
2. Growth Fund:
. The Russell 1000 Growth Index will replace the S&P 500 Index as the Fund's
benchmark. The Fund is making this change because the sector diversification
in the Russell 1000 Growth Index is more comparable to that of the Fund. The
average annual total returns of the Service Share and Institutional Share
Classes of the Fund versus the Russell 1000 Growth Index and the S&P 500
Index as of 12/31/99 are as follows:
<TABLE>
<CAPTION>
Since Since
Inception Inception
1 Year 3 Years 5 Years 1/2/97 12/12/94
<S> <C> <C> <C> <C> <C>
Growth Fund
Service Shares 14.45% N/A N/A 23.35% N/A
Institutional Shares 14.70% 23.64% 26.34% N/A 27.10%
Russell 1000 Growth Index* 33.16% 34.07% 32.42% 34.15% 33.04%
S&P 500 Index** 21.04% 27.56% 28.54% 27.59% 28.91%
</TABLE>
* The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. The Index figures do not reflect any fees or expenses.
** The S&P 500 Index is an unmanaged index that emphasizes large capitalization
companies. The Index figures do not reflect any fees or expenses.
. The first paragraph under the Fund's primary investment strategies is amended
to substitute the Russell 1000 Growth Index for the S&P 500 Index.
3. Growth and Income Fund:
. The name of the Fund is changed to the Value Fund.
. The Fund's benchmark for comparison of average annual total return will be
the Russell 1000 Value Index; the Fund will no longer use one of its current
benchmarks, the S&P 500 Index. The Fund is making this change because the
Russell 1000 Value Index contains securities that are more comparable to
those held in the Fund's portfolio than the S&P 500 Index. The average annual
total returns of the Service Share and Institutional Share Classes of the
Fund versus the Russell 1000 Value Index and the S&P 500 Index as of 12/31/99
are contained in the Fund's prospectuses.
. The second paragraph under the Fund's primary investment strategies is
amended to substitute the Russell 1000 Value Index for the S&P 500 Index.
. David W. Wente, Vice President, is the portfolio manager for the Value Fund
(formerly the Growth and Income Fund). Mr. Wente has been an equity analyst
on the Fund since its inception. He rejoined Commerce in 1996 after spending
two years as a financial analyst with a regional retail company. He initially
joined the Commerce Bank's Investment Management Group in 1993 and has nine
years of investment management experience.
