Kingdom Advisors across Canada have expressed a consistent need: Canadian-domiciled investment options for clients seeking portfolios aligned with Christian values. The Capstone Biblically Informed Canadian and U.S. Equity Funds respond to this demand, providing professionally managed equity exposure with biblical research criteria applied alongside traditional fundamental analysis.
This article provides educational information for advisors evaluating these funds for suitable clients. Advisors remain responsible for determining suitability for each individual client situation.
Meeting Client Needs: The Demand for Canadian Options
Many Kingdom Advisors have directed clients to U.S.-based biblically informed funds when asked about values-aligned investing. While these products serve a purpose, they present challenges for Canadian investors.
- The U.S.-Based Fund Challenge: U.S.-domiciled funds create tax considerations for Canadian investors. Foreign dividends don't qualify for the Canadian dividend tax credit. Currency conversion adds complexity. Reporting requirements differ from Canadian standards.
- ESG and SRI Limitations: Environmental, social, and governance (ESG) or socially responsible investing (SRI) funds provide another alternative, but many Kingdom Advisors find these don't fully align with Christian values. ESG frameworks may prioritize different issues than biblical principles.
- Filling the Gap: The Capstone Biblically Informed Canadian and U.S. Equity Funds provide Canadian-domiciled, professionally managed equity funds applying biblical research criteria. The Canadian dollar denomination, tax-aware structure, and explicit Christian values framework address the limitations Kingdom Advisors have experienced with alternatives.
Common Client Questions
"How do you determine what companies align with Christian values?" This question invites explanation of the Four Guiding Investment Principles and the BIO Committee governance structure, with Scripture as the guiding authority. The Biblical Overlay Policy provides detailed documentation clients can review.
"Will I sacrifice returns by investing according to my values?" The funds carry equity market risks like any actively managed equity funds, but values based funds have not traditionally shown to have a material difference when it comes to performance returns. Past performance of the Capstone Canadian Equity Income Strategy demonstrates the investment team's capabilities, though this performance cannot be attributed to the funds and past performance does not indicate future results.
"What makes these funds different from ESG funds?" The funds apply biblical principles specifically, not generic social responsibility screens that may include or exclude companies differently than Christian values would suggest.
Helping Clients Understand Trade-Offs: Values-aligned investing involves trade-offs. The biblical research criteria create a different opportunity set than broad market indices. Active management costs more than passive index funds. These trade-offs should be discussed transparently.
Explaining the Research Process to Clients
The Four Guiding Investment Principles: Companies are evaluated against four biblical principles: valuing human life (respect for human dignity), stewarding creation responsibly (environmental stewardship and development), encouraging healthy behaviors (supporting human flourishing), and supporting biblically consistent practices (integrity and biblical wisdom in business).
The BIO Committee: Four members with 105+ years of combined experience review and vote on all stock selections from a biblical perspective. The committee includes one independent member external to Capstone Asset Management, providing accountability.
Partnership with Brightlight Impact: Brightlight Impact, an independent third-party resource, performs analysis in addition to Capstone's research to provide support to the decision-making process.
Acknowledging Interpretation: Advisors should help clients understand that biblical research involves interpretation and judgment. No companies are perfect. The research seeks companies that are at least morally neutral and ideally aligned with biblical values.
Investment Management Quality
Values alignment matters deeply to clients seeking these funds, but investment management quality matters equally for their financial futures.
The Investment Team: The funds are managed by the same Portfolio Managers who have guided the Capstone Canadian Equity Income Strategy since October 30, 2022. This team includes five Portfolio Managers and two Associate Portfolio Managers, led by Chief Investment Officer Paul Carter, CFA.
Track Record: The Capstone Canadian Equity Income Strategy has delivered a 20.1% annualized return since inception through August 31, 2025, based on a model portfolio, compared to 18.2% for the TSX Index and 13.2% for the TSX High Dividend Index over the same period. This performance reflects actively managed accounts and does not necessarily represent the performance of a live fund.
Important: Past performance does not indicate future results. The strategy's track record cannot be attributed to the funds, which launched October 30, 2025 with limited operating history. All investments carry risks including possible loss of principal.
Investment Discipline: The team applies disciplined fundamental analysis focused on value-oriented equity research. Their investment process emphasizes financial strength, reasonable valuations, and quality business characteristics.
Fee Transparency
The management fee for the ETF series of both TSX:BIVC and TSX:BIVU is 0.80% while our mutual funds series management fees are as follows:
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Series A (BIV1001) 1.95% per annum
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Series D (BIV1051) 0.95% per annum
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Series F (BIV1011) 0.95% per annum
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Series I (BIV1021) negotiated
What the Fee Covers: Experienced Portfolio Managers conducting fundamental analysis, dedicated biblical research analyst evaluating values alignment, BIO Committee governance, partnership with Brightlight Impact for third-party analysis, and compliance and operational infrastructure.
Competitive Context: The 0.80% management fee is competitive among actively managed Canadian equity funds. Passive index ETFs charge lower fees (typically 0.05%-0.25%), but provide no biblical research or active security selection.
Value Proposition: For clients prioritizing both investment management quality and values alignment, the fee provides access to professional management they couldn't replicate individually.
Total Costs: The 0.80% represents the management fee. Total Management Expense Ratio (MER) will be higher due to operating expenses. Detailed fee information is available in the prospectus.
Suitability Assessment
Not all Kingdom Advisor clients should invest in these funds. Advisors must determine suitability for each individual client.
Investment Objectives: Do clients need Canadian equity exposure, U.S. equity exposure, or both? Do they seek dividend income or balanced growth and income?
Risk Tolerance: These funds invest in equities and carry market volatility risk. Clients must be comfortable with equity market fluctuations and understand that values criteria may create different return patterns than broad market indices.
Time Horizon: Equity funds generally suit investors with longer time horizons who can ride out market volatility.
Values Alignment Assessment: Does the biblical research methodology align with the client's specific values? Review the Biblical Overlay Policy with clients to ensure alignment.
Portfolio Positioning
Canadian Fund: Emphasizes dividend-paying securities. Suitable for Canadian equity allocation, particularly for income-focused strategies. Tax-efficient in non-registered accounts due to Canadian dividend tax credit.
U.S. Fund: Provides U.S. market access with growth and income balance. Suitable for geographic diversification. Distributions treated as foreign income, making them more suitable for registered accounts.
Combined Approach: Many advisors may recommend both funds for clients seeking comprehensive equity exposure with values alignment, balancing Canadian dividend income with U.S. growth opportunities.
Account Type Considerations
Non-Registered Accounts: The Capstone Biblically Informed Canadian Equity Fund may be more suitable due to Canadian dividend tax advantages. The Capstone Biblically Informed U.S. Equity Fund’s foreign income treatment makes it less tax-efficient.
Registered Accounts (RRSPs, TFSAs, RESPs): Both funds work well in registered accounts where tax treatment doesn't differ between income sources.
Due Diligence Resources
Biblical Overlay Policy: Available at capstoneassets.ca. Review with clients to explain research methodology.
Fund Facts and Prospectus: Essential documents for understanding investment objectives, risks, fees, and fund details.
Quarterly Commentary: Subscribe to receive ongoing updates about fund management and performance.
Advisor Support: Contact Capstone at compliance@capstoneassets.ca or 1.855.437.7103 for advisor-specific questions or client presentations.
Client Conversations
When introducing these funds to clients, focus on:
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Meeting their stated need for values-aligned investing
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Explaining the research methodology and governance
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Discussing investment management quality alongside values alignment
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Setting appropriate expectations about performance and volatility
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Ensuring thorough understanding of fees and costs
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Determining appropriate allocation within their overall portfolio
Conclusion
The Capstone Biblically Informed Canadian and U.S. Equity Funds provide Kingdom Advisors with Canadian-domiciled options for clients seeking portfolios aligned with Christian values. The funds combine professional investment management with explicit biblical research criteria, addressing a need many advisors have experienced when serving values-conscious clients.
Thorough due diligence, suitability assessment, and transparent client communication remain essential when considering these funds for client portfolios.
For advisor resources, due diligence materials, or questions, contact Capstone at compliance@capstoneassets.ca or 1.855.437.7103.
*Important Disclosures: Commissions, trailing commissions, management fees, and expenses may be associated with investments in mutual funds and exchange-traded funds. Please read the prospectus before investing. Mutual funds and ETFs are not guaranteed; their values change frequently, and past performance may not be repeated. The simplified prospectus, fund facts, and ETF facts are available on SEDAR+ at www.sedarplus.ca or consult with a registered investment dealer or advisor.