The Ave Maria Value Fund's Contrarian Exposure to Resource and Infrastructure Sectors in Q3 2025: Strategic Positioning in High-Conviction Royalty and Water Management Stocks Amid Market Divergence

In a market landscape marked by divergent performance between growth and value sectors in Q3 2025, the Ave Maria Value Fund (AVEMX) has carved a distinct path. Despite delivering a modest 0.43% total return for the quarter-well below the S&P MidCap 400® Index's 5.55% and the S&P 500® Index's 8.12%-the fund has doubled down on undervalued, cash-flow-driven assets in resource and infrastructure sectors, as highlighted in a Seeking Alpha commentary. This strategic divergence reflects a long-term bet on high-conviction royalty and water management stocks, positioning AVEMX to capitalize on structural tailwinds in commodities and energy transition demand.

A Contrarian Lens: Royalty Models and Streaming Agreements

At the heart of AVEMX's Q3 strategy lies its exposure to companies like Wheaton Precious Metals (WPM), a flagship player in the gold and silver streaming sector. Wheaton's Q3 2025 results underscore its strategic appeal: the firm reported a 55% year-over-year revenue surge to $476 million, driven by soaring gold prices and production growth from key assets like Salobo and Antamina, according to a GuruFocus earnings call. A landmark $670 million streaming agreement for the Spring Valley gold project in Nevada further solidifies its position, granting Wheaton 8% of the mine's production until 300,000 ounces are delivered, as reported by MuggleHead. This low-cost, high-margin model aligns with AVEMX's focus on capital-efficient, cash-flow-positive investments.

The fund's potential inclusion of Permian Basin Royalty Trust and WaterBridge Infrastructure suggests a parallel emphasis on energy and water infrastructure. While direct holdings remain undisclosed, the fund's strategic commentary hints at a deliberate tilt toward assets benefiting from energy transition dynamics and regulatory tailwinds in water management, as noted in the Seeking Alpha commentary. For instance, WaterBridge Infrastructure's role in addressing critical water scarcity challenges-coupled with its stable fee-based revenue model-positions it as a defensive play in an era of climate-driven resource volatility.

Strategic Rationale: Underperformance as a Feature, Not a Bug

AVEMX's Q3 underperformance, while stark, may reflect its adherence to a contrarian thesis. While broad indices benefited from cyclical rebounds and AI-driven growth stocks, the fund prioritized long-duration assets with intrinsic value. Wheaton Precious Metals, for example, boasts over $1.2 billion in cash and an undrawn $2.5 billion credit facility, as noted in the GuruFocus earnings call, providing flexibility to fund new streaming deals without dilution. This financial fortitude-combined with its leveraged exposure to gold price rallies-positions it as a hedge against macroeconomic uncertainty, a logic AVEMX appears to have embraced.

The fund's focus on royalty and infrastructure stocks also aligns with broader trends. Gold streaming companies like Wheaton thrive in high-inflation environments, while water infrastructure firms gain relevance amid regulatory pressures and climate adaptation spending. These sectors, though less glamorous than tech or biotech, offer predictable cash flows and downside protection-qualities AVEMX's managers likely value in a fragmented market.

Long-Term Horizon: Can AVEMX Outperform?

Critics may question whether AVEMX's Q3 underperformance signals a misalignment with market dynamics. However, the fund's strategic positioning in resource and infrastructure sectors suggests a multi-year outlook. Wheaton's Spring Valley deal, for instance, is slated to begin production in 2028, implying AVEMX is investing for future growth rather than near-term gains, as reported by MuggleHead. Similarly, Permian Basin Royalty Trust's exposure to oil and gas royalties benefits from sustained energy demand, even as renewables gain traction-a duality that could insulate the fund from sector-specific volatility.

Moreover, AVEMX's underperformance in Q3 may have created a buying opportunity. With the fund's portfolio concentrated in undervalued, high-conviction names, its long-term trajectory could diverge sharply from benchmarks as these holdings mature. The key will be monitoring execution risks, such as regulatory shifts in mining or water rights, and ensuring that management maintains discipline in capital allocation.

Conclusion: A Bet on Structural Tailwinds

The Ave Maria Value Fund's Q3 2025 strategy exemplifies a disciplined, contrarian approach to resource and infrastructure investing. By prioritizing royalty models, streaming agreements, and water infrastructure, AVEMX has positioned itself to benefit from structural trends-rising commodity prices, energy transition demand, and climate resilience spending-that transcend short-term market cycles. While the fund's near-term underperformance is evident, its long-term potential hinges on the success of these high-conviction bets. For investors with a multi-year horizon, AVEMX's strategic exposure to undervalued, cash-flow-driven assets may yet prove to be a masterstroke.