Quarterly letter 12/31/2025
Dear fellow investors,
We wish you and your loved ones a healthy and prosperous year!
The final quarter of 2025 was characterized by a continuation of the positive sentiment that dominated most of the year. In both the United States and Europe, stock markets ended the year at solid levels, supported by declining inflation and continued strong profitability among large companies, particularly in the technology sector. For European investors who invested in US stocks, however, the 11.85% decline of the dollar against the euro did throw a spanner in the works.
We see average normal valuations for profitable and growing companies in our portfolios. In Europe, the positive effect of major infrastructure investments in Germany should be felt in the course of 2026. In America, further interest rate cuts are expected, which could give the stock markets a boost. On the other hand, questions arise about the enormous expenditure on AI developments and how this can be recouped through sufficiently high revenues. Time will tell.
As always, we remain focused on attractive valuations and diversify across different sectors and countries.
Internally, we also pay close attention to what is known as the “combined ratio.” By this we mean the sum of the dividends paid out by our companies on the one hand and the percentage of their own shares that they buy back and destroy on the other. These are factors that support the share price.
Capital gains tax
Many of you asked us questions about the capital gains tax. The draft bill was submitted to the House in December and is likely to be approved in the spring. However, it will already apply from January 1, 2026.
We will briefly summarize a few important points:
- The rate is 10%.
- It applies to all kinds of investments, including funds, branch 23 insurance policies, gold, and foreign exchange.
- It is a tax applicable to individuals residing in Belgium and to non-profit organizations and foundations, unless they are recognized for tax-deductible donations.
- There is no retroactive effect. The added value accumulated before December 31, 2025 remains unaffected.
- In the case of split ownership, the bare owners must pay the tax.
- The tax only applies to sales. It does not apply to inheritances and gifts. However, if the heir or beneficiary later sells the investment, capital gains tax will be levied on the capital gain compared to the original purchase price or compared to the value on December 31, 2025, if the investment was purchased before this date.
- Each year, you can realize up to €10,000 in capital gains without paying tax. This therefore yields a tax benefit of up to €1,000.
- No doubt much ink will be spilled on this subject, and we will closely monitor how this tax will work in practice.
We are also pleased to announce that Emiel Beirens has joined our team of financial analysts and fund managers. He joined the team in November. Emiel is a commercial engineer specializing in finance and has spent the past two years working at Rothschild & Co in Brussels.
As usual, we will conclude with the service announcements. Only one date has been set for the first quarter of 2026, but more may be added:
Saturday, March 21 at 2 p.m. at NOA Outdoor Living, Polydore Rensonstraat 8, 9770 Kruisem: our annual Investor Meeting
A formal invitation will follow, but in any case, all investors in our funds are welcome. Highly recommended!
We look forward to meeting you at one of our events or in a personal meeting.
In the meantime, stay up to date by following us on our LinkedIn page: https://www.linkedin.com/company/value-square/.
Best regards,
Pascal Cornelis - Kris Hermie – Patrick Millecam – Cynthia Peeters – Tibo Dewispelaere - Astrid Verlot – Pauline Verhelst – Dieter Engels - Thomas Maes - Jens De Maeseneire - Koen Van de Vyver - Jens Verbrugge – Petrick Step - Wouter Verlinden - Wim Descamps - Emiel Beirens - Koen Hoffman
