Choosing the right investment approach: investment funds vs. individual lines

When building a portfolio, the choice between investment funds and individual lines plays an important role. Investment funds make it easy to achieve broad diversification across different sectors, regions, and asset classes with a single investment. This offers you, as an investor, an efficient way to spread your assets and take advantage of opportunities worldwide. Individual lines generally require more capital to achieve the same diversification, because you purchase specific investments separately. This approach is therefore more suitable for investors with greater assets or a preference for customization and control. 

Investors who want a clear understanding of the composition and performance of their portfolio often appreciate the detail provided by individual lines. This approach gives you direct insight into specific stocks, bonds, or other assets, allowing you to track their individual performance over time. With investment fund-based management, this level of detail is not usually available, but the simplicity may offer you, as an investor, greater comfort.

At ABN AMRO MeesPierson, you can opt for a fully tailor-made investment portfolio. This can be done with individual stocks and bonds as well as with investment funds. Within discretionary asset management and investment advice.

A portfolio with individual lines offers the greatest freedom because the financial instruments can be selected taking your specific preferences into account. If you opt for a portfolio built up with investment funds, you also have a wide choice, but within clear limits. This is because each investment fund invests according to a defined investment strategy and must take into account the investment framework set out in the prospectus.

Taxation is an important factor in investment decisions because it has a direct impact on the net return of a portfolio. For Belgian investors, withholding taxes, stock exchange tax, and Reynders tax (The Reynders tax only applies to natural persons, not to companies) are important taxes to take into account. These taxes apply to your investments, but they differ in their application. To clarify this, we offer a simplified, non-exhaustive, overview of the main characteristics between these taxes, giving you a better understanding of their impact on your portfolio.

For Investors in Investment Funds

With investment funds, tax treatment occurs at two levels. Transactions within the investment fund have no direct tax consequences for you as an investor. Taxation only comes into play when the investment fund is bought or sold within your portfolio or when you receive income from it.

• The stock exchange tax is a tax you pay when buying and selling investment funds on the stock exchange. The rate can be as high as 1.32%, depending on the transaction and the financial instrument.
• The Reynders tax is a specific capital gains tax on funds (partly) invested in bonds. You pay 30% on the fixed-income portion of the capital gains when you sell.
• Withholding tax is a 30% tax that you pay on income from movable capital, applicable to distribution funds. Capitalization funds, on the other hand, reinvest all income, which means that no withholding tax applies.

For Investors in Individual Lines

• The stock exchange tax is a tax you pay when buying or selling stocks and bonds. The rate can be as high as 1.32%, depending on the transaction and the financial instrument.
• The Reynders tax does not apply to individual stocks or bonds.
• Withholding tax is a tax you pay on income from movable capital, such as dividends from stocks and interest from bonds. The rate is 30%.

From 2026, a new capital gains tax of 10% will be introduced in Belgium. This tax will be levied on realized capital gains, which means that the tax will only apply when an investor sells assets. The taxable base is formed by the difference between the sale price and the purchase value of the financial instrument.

The new tax applies in addition to existing levies such as withholding tax, Reynders tax and stock exchange tax, which remain applicable.

The specific impact varies depending on whether you invest in individual lines (such as stocks or bonds) or in investment funds. Based on the information currently available, we provide an overview of the main differences below:

For investors in investment funds

• Transactions: Transactions carried out by the fund manager within the fund (such as buying and selling underlying assets) are exempt from capital gains tax. Capital gains tax is only levied on a (partial) sale of the investment fund within the portfolio. This simplifies the administrative follow-up for the investor.
• Annual tax exemption: Investors in investment funds can only make use of the capital gains tax exemption (base amount of €10,000 (2026), indexed annually) at the time of exit, whether partial or total.
• Deductibility of capital losses: Capital losses on investment funds are only deductible at the time of (partial) exit.

For investors in individual lines

• Transactions: Any sale of individual lines (such as stocks or bonds) may give rise to capital gains tax if a capital gain is realized.
• Annual tax exemption: Investors in individual lines can make use of the capital gains tax exemption on any capital gains realized each year (base amount of €10,000 (2026), indexed annually).
• Deductibility of capital losses: Realized capital losses can be deducted from taxable profits each year.

Each of these factors represents a trade-off, and the choice depends on your personal preferences, financial goals and level of involvement. At ABN AMRO MeesPierson, we understand that these decisions are personal. Our expertise lies in assessing your unique situation and guiding you toward investment solutions that align with your goals.

Whether you value the control of individual lines or prefer the convenience of investment funds, we are ready to advise you and provide the right solutions.