📅 Last updated: 8 May 2026
· 🏷 Topic: Value, growth, factor investing, Buffett
· 🇧🇪 For: Belgian investors
Value and growth are two opposing poles in investment philosophy. Value investors (Warren Buffett, Benjamin Graham) look for undervalued companies. Growth investors (Peter Lynch in his Magellan years) look for fast-growing companies, often more highly valued.
Value: the Warren Buffett school
Philosophy: buy companies below their intrinsic value — what the company is truly worth based on future cash flows.
Characteristics of value stocks:
- Low P/E (price/earnings) — typically <15
- Low P/B (price/book value) — sometimes below 1
- High dividend payout
- Stable, often “boring” sectors (banks, energy, utilities, consumer staples)
- Long operational history
Well-known Belgian value stocks (illustrative, not a recommendation): KBC, Ageas, Solvay, Sofina.
Growth: the innovation school
Philosophy: buy companies that grow faster than the market, even if they look “expensive” on classical ratios.
Characteristics of growth stocks:
- High P/E (often >30)
- High P/S (revenue is growing but earnings are still limited)
- No or low dividend — profits reinvested into growth
- Innovative sectors (technology, biotech, e-commerce)
- High volatility
Well-known growth stocks worldwide: Nvidia, Tesla, Amazon, Adyen, ASML.
Historical performance
Long-term studies show that value historically outperformed (1930-2000) — the “value premium” or HML factor (Fama-French).
But since 2010 growth has massively outperformed:
– 2010-2025: growth (driven by tech) +600%
– 2010-2025: value: +200%
Reason: low interest rates (cheap capital), the tech revolution (Apple, Microsoft, FAANG), platform economies.
Since 2022: some value comeback due to rising interest rates — but growth remains the dominant factor.
How to invest in value or growth?
Option 1 — Separate ETFs:
- VLUE (iShares Edge MSCI World Value Factor) — value tilt
- MGEU (iShares Edge MSCI World Momentum) — momentum, not identical to growth
- DGRO (iShares Core Dividend Growth) — dividend growth
Option 2 — Multi-factor ETF:
- JPGL (JPMorgan Global Equity Multifactor) — combines value + size + quality + momentum
- TER higher than a broad index (~0.3%)
Option 3 — World index (no specific tilt):
- VWCE/IWDA contains a mix of value and growth — market-weighted.
- For most beginners the simplest choice.
Which suits whom?
Value:
– Those who are patient and believe in mean reversion.
– Those who think they see a tech bubble and expect a value comeback.
– Those who want higher dividends.
Growth:
– Those who see innovation and disruption as drivers.
– Those who accept higher volatility for potentially higher returns.
– Often without dividend payout — more tax-efficient in Belgium.
No tilt — world index:
– Those with no preference.
– Those who prefer simplicity.
– Those who accept the market consensus.
Belgian tax angle (2026)
Value strategies typically pay higher dividends → 30% withholding tax (with the €859 dividend exemption reclaimable per person per year). Growth strategies typically reinvest → no dividend taxation, but the 10% capital-gains tax above the €10.000 annual exemption (since 1 January 2026) applies on realised gains at sale. Net of tax, growth tilts can be slightly more efficient in Belgium for buy-and-hold investors. See Belgian investment taxes(NL).
The modern factor debate
Research (Fama-French, AQR Capital) shows that factors come and go. Anyone 100% in value during 2010-2020 had years of underperformance. Diversification across factors (multi-factor) often performs more consistently.
For Belgian retail investors: a value/growth tilt is an advanced choice. For most retail investors a world index (market-weighted) is a safe base. Add tilts only when you have conviction and understand the strategy.
💡 Buffett himself advises in his letters to shareholders that most retail investors are better off with an S&P 500 index ETF than with active stock picking — even though he himself has achieved decades of outperformance with value investing.
🔗 See Stocks investing basics and Diversification explained.
The implementation question that decides it in Belgium
The value-versus-growth debate is usually conducted on historical premia. For a Belgian investor a practical layer sits on top, and it often weighs more than the expected difference itself.
- Factor ETFs mostly sit in the expensive band. They are predominantly accumulating and frequently registered in Belgium, meaning 1.32% stock-exchange tax per purchase against 0.12% for a distributing broad index fund. That is elevenfold, paid on every contribution.
- Holding a tilt requires rebalancing. Value and growth diverge for years; without correction your tilt erodes on its own. But rebalancing means selling, and selling in Belgium is taxable for stock-exchange tax and potentially for the 10% capital-gains levy above the €10,000 exemption.
- The horizon lengthens rather than shortens. Documented premia apply over decades, with long stretches of underperformance. Add a structurally higher entry cost and the period a tilt needs to earn its keep runs longer than the literature alone implies.
What this means in practice
If you do want to tilt, the efficient route is to direct new contributions rather than reweight through sales. The weighting shifts without a single taxable event, and you avoid a tilt that mainly produces transaction tax.
Also check FSMA registration per ISIN before buying: two value ETFs on comparable indices can fall in different stock-exchange tax bands, and that gap is larger than the TER difference they are usually compared on.
Sources
- Fama, E. & French, K. — Common risk factors in returns (1993)
- Buffett, W. — Berkshire Hathaway letters to shareholders
- AQR Capital — Factor research
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