The differences between growth and value may be lost on average investors, but among financial professionals, few investing concepts inspire more fervor.

Value stocks are companies that sell for less than they're worth, based on their fundamentals; this investment style is favored by such bargain hunters as Warren Buffett and Bill Miller, portfolio manager of the Legg Mason Value Trust. Growth companies are expected to make substantial gains in revenue and profit relative to their peers. The share prices of growth stocks are apt to reflect the market's hopes for the future rather than their current fundamentals.

Wall Street has produced a plethora of options for professionals and individuals looking for ways to adhere to these investment styles, including a slew of actively managed funds focused exclusively on growth or value stocks of all sizes. The major indexes have also been sliced along style lines.

Standard & Poor's is in the process of updating its style indexes, with plans to offer two ways to track value and growth stocks, including one that seeks to more closely match the strategies used by fund portfolio managers.

S&P is phasing out its Barra-style benchmarks, which relied solely on a stock's price-to-book value to determine whether it would be listed in a value or growth index, in favor of an approach devised by Citigroup that evaluates seven different factors. In addition, instead of classifying stocks as either growth or value, the new methodology will give companies a style "score." The stocks that are not 100 percent growth or 100 percent value will have their market caps distributed accordingly between the indexes.

There will always be some stocks that are not pure growth and not pure value, that have characteristics of both styles, said S&P index strategist Srikant Dash. It's about 30 percent of the market. In the new style index series, "every stock will find a home," he said. This is similar to methodology already used by index providers such as Russell and Morgan Stanley Capital International, and will help keep S&P's indexes competitive.

S&P also has developed a second version of the series, called pure style, that will include only stocks with pure growth or pure value characteristics. Unlike style indexes from other providers, this series will not even consider the 30 percent of stocks that fall between. This more closely reflects the methods used by style managers, Dash said.

"If somebody is interested in pure value stocks, that's all they want, period," Dash said. "If you look at active managers . . . that's how they do it. If someone is a pure growth manager, he will buy pure growth stocks; that's it."

Another interesting difference between the two is that while the traditional style series is cap-weighted -- meaning the largest stocks have more influence over the portfolio -- the stocks in the pure style indexes are weighted according to their style scores.

The S&P/Barra growth and value indexes will officially be replaced by the new style index series Dec. 16, and all mutual and exchange-traded funds that track them will be rebalanced to reflect the change. This includes a portfolio of iShares ETFs pegged to the S&P style indexes. S&P is in discussions to license the pure style series, so it's not clear when products tracking them will be available.

For S&P, this is a positive change, said Morningstar Inc. analyst Dan Culloton. Classifying stocks as value or growth by using only the price-to-book ratio -- the stock's capitalization divided by its book value -- has produced some anomalies over the years. Notably, in the wake of the bull market, tech companies that were not considered value stocks by any stretch of the imagination started popping up in value portfolios because they made acquisitions that boosted the goodwill on their balance sheets, making their price-to-book values lower than they should have been. Fiber-optic parts maker JDS Uniphase Corp. is an example of a company that wound up in a value index, though few value managers would consider buying it.

"Using a multifactor approach gives the index a better shot at representing the actual growth and value universes that the actual managers work in," Culloton said. "More importantly, more practically, the new style indexes could help the funds that attract them keep turnover low and offer more complete exposure."

Over the very long term, studies show, value has outperformed growth. For this reason, some investors like to stick with value funds. Growth funds are often used by professionals making tactical allocation decisions based on where they think the style cycle is headed. This can be a risky strategy, however, even for sophisticated investors.

For individuals, especially those with smaller portfolios, there may be little advantage to fine-tuning according to style, said Eric Tyson, author of "Investing For Dummies." While retirees may be better off in less volatile value portfolios, most people would be served just as well by a total stock-market index, which would hold both value and growth. Being in the market in the first place, staying diversified and keeping expenses low are still the most important keys to investing success, Tyson said.

"These nuances are more of interest to the professional than they are to individuals," Tyson said. "Your average or typical individual investor starts to roll their eyes and say, 'Do I really need to know this?' And at the end of the day, the answer is probably not."