Value investing's identity crisis, according to the people who sell it
A value manager argues the growth-value divide is largely fictional -- a claim that flatters its own flexibility
Boston Partners, the value-equity arm of Robeco, has published a paper arguing that the long-standing split between “growth” and “value” stocks is less a fact about companies than a quirk of index construction. Its evidence is a genuinely interesting data point: at the end of 2025, nearly 250 companies sat in both the Russell 1000 Value index and the Russell 1000 Growth index simultaneously, including household names. The paper’s conclusion -- that style boxes are porous, and that a sufficiently flexible value manager should not be penalised for holding stocks the market happens to label “growth” -- is also, conveniently, a justification for how Boston Partners itself invests.
The overlap point is real and worth taking seriously. Index providers score constituents along a continuum of value-like and growth-like characteristics rather than assigning each company to a single camp, so a stock can draw weight in both benchmarks at once. The paper’s examples are well chosen: Alphabet, Amazon and Meta, conventionally filed under “growth,” now generate the kind of free cash flow and capital returns historically associated with value; Coca-Cola and American Express, filed under “value,” have produced growth-like earnings durability. That such firms can be the same business viewed through two lenses is a fair description of how index methodology actually works.
Where the paper is less convincing is in its leap from “the boundary is blurry” to “drift is therefore not really drift.” It frames style deviation as evidence of “process discipline rather than process breakdown,” but this is precisely the distinction any manager who has strayed from a mandate would want to draw. A value fund that increasingly holds stocks the market calls growth might indeed be following sound, repeatable logic -- or it might simply be chasing performance and redescribing the result as philosophy. The paper offers no external test for telling the two apart; it asks investors to trust the manager’s own account of its discipline.
The “Three Circle” framework -- valuation, fundamentals, momentum -- is a sensible enough description of how many active managers actually pick stocks, value-labelled or not. The “two-circle” watch list, holding pre-vetted names that satisfy two of three criteria and await the third, is a reasonable way to stay ready for dislocations. But it is also, structurally, a licence to hold growth-flavoured names on the basis that fundamentals and momentum are good enough, with valuation discipline promised as something that will eventually catch up. That is a defensible investment approach. It is a different thing from a finding that growth and value are not “mutually exclusive economic categories.”
None of this means Boston Partners’ process is poor; a 30-year record, cited in the paper, is at least suggestive that something in the approach works. But the paper is marketing material, explicitly labelled as such, written by a value house at a moment when growth stocks have dominated returns for years and rigid style boxes have arguably cost value managers assets. A philosophical case for flexibility is, among other things, a timely case for not being held to one.
