We’re using cookies, but you can turn them off in Privacy Settings.  Otherwise, you are agreeing to our use of cookies.  Accepting cookies does not mean that we are collecting personal data. Learn more in our Privacy Policy.


The value premium is driven by 7 percent of the stock market. The 93 percent of market capitalization held most by institutional investors is value premium free. In contrast, in stocks held most by individual investors, the value premium, even when the stocks are value weighted, reaches a staggering 185 bps per month. In addition, the value premium is a long-side anomaly. It is a value premium puzzle, not a growth discount puzzle.

About the Author(s)

Ludovic Phalippou

Ludovic Phalippou is assistant professor of finance at the University of Amsterdam, where he teaches investments at the undergraduate and graduate levels, as well as in specialized executive education programs. He is also a research fellow at Yale University. The research of Professor Phalippou has been presented at academic finance conferences in the U.S. and in Europe and at seminars in universities such as UC Berkeley and Yale, and he has authored articles published in journals such as The Review of Financial Studies, the Journal of Economics Perspectives, Harvard Business Review, and the Review of Finance. His current research focuses primarily on the risk and return of investing in private equity funds. Professor Phalippou holds a BSc in economics from Toulouse University, master's degrees in mathematical finance and economics from the University of Southern California, and a PhD in finance from INSEAD.