The investment industry has long organized itself around a binary: growth versus value. Separate indexes, separate mandates, separate expectations. Yet the companies that populate real portfolios rarely honor that boundary. In a new paper published March 2026, Boston Partners1, a sister company of Robeco, challenges this convention directly, arguing that style labels obscure more than they reveal and that genuine value investing requires something more rigorous than cheapness.
The Russell 1000 Problem
The argument begins with benchmark construction. At the end of 2025, nearly 250 companies appeared simultaneously in both the Russell 1000 Value Index and the Russell 1000 Growth Index. These are not edge cases or incidental overlaps. They represent, as the paper notes, "economically meaningful exposures within both style constructs."
The implication cuts to the heart of how advisors structure portfolios. If the benchmarks themselves treat style as a continuum rather than a binary, the downstream logic of siloed manager selection deserves scrutiny. Boston Partners puts it plainly: "growth and value are not mutually exclusive economic categories but overlapping classification frameworks applied to the same underlying businesses."
The firm illustrates this with household names. Alphabet, Amazon, and Meta are reflexively labeled growth, yet their free cash flow generation and capital return profiles increasingly resemble traits long associated with value. Coca-Cola and American Express, canonical value names, have demonstrated earnings expansion and pricing power more commonly linked to growth narratives. Advanced Micro Devices may exhibit high forward growth expectations while its valuation dynamics simultaneously shift its style classification. The categories bend under scrutiny.
What Cheapness Cannot Tell You
Boston Partners draws a sharp distinction between price multiples and actual value. Static screening on price alone, the paper argues, elevates exposure to value traps, businesses that "appear inexpensive but lack the fundamental trajectory required to unlock that discount."
The firm's response is its Three Circle framework, built around three interdependent dimensions: valuation, fundamentals, and momentum. Valuation asks how much is being paid. Fundamentals ask what is actually being bought. Momentum asks whether the business is getting better, staying the same, or getting worse. No single dimension is sufficient. As the paper states, "each dimension in isolation is incomplete."
Drift as Discipline
One of the more provocative arguments in the paper concerns the concept of style drift. The conventional concern is that a value manager holding what looks like a growth stock has broken mandate. Boston Partners reframes this entirely. The firm argues that apparent stylistic movement may reflect "the consistent application of an investment philosophy designed to underwrite key fundamentals, such as valuation discipline, earnings durability, balance sheet strength, and wise capital allocation, whose evolution naturally alters a company's surface-level style profile."
The conclusion follows: "what appears as stylistic movement may, in fact, be evidence of process discipline rather than process breakdown."
The Two-Circle Watch List
The operational expression of this philosophy is the firm's quality watch list. Each analyst maintains a pipeline of companies that satisfy two of the three criteria but not yet all three. A company may show compelling fundamentals and positive momentum but not yet meet the valuation threshold. These stocks are not discarded. They are pre-underwritten, monitored for the moment when a dislocation closes the gap. "During periods of market stress or style rotation, valuation gaps can close rapidly," the paper notes, and when they do, Boston Partners says it is "prepared to move on with speed and conviction."
This pipeline structure directly addresses one of the more persistent criticisms of active value management: that it is slow to act when volatility creates opportunity. The watch list is the mechanism for standing readiness.
Key Takeaways for Advisors and Investors
- Style box categorization is a convention, not a permanent economic identity. At the benchmark level, nearly one in three large-cap names spans both value and growth indexes.
- Cheapness without fundamental support is a liability. Value traps are the direct consequence of screening on price multiples without evaluating earnings trajectory or capital allocation quality.
- Business quality evolves. A company's style classification is not fixed. What matters is whether valuation, fundamentals, and momentum are aligned at the time of investment.
- Apparent style drift may signal discipline, not deviation. A manager holding names that appear growth-oriented may be following the fundamentals, not abandoning a mandate.
- Prepared conviction wins in volatile markets. Pre-underwritten opportunity pipelines allow managers to act decisively when dislocations emerge, which is precisely when the cost of hesitation is highest.
Footnote:
Boston Partners. "Redefining Value: From Style Category to Investment Discipline." Robeco, March 2026.
