Equity Management Associates: The Gold Fund That’s Beating Everyone in 2025 | Buyside Digest
InsightArticleOctober 27, 20256 min read
Equity Management Associates: The Gold Fund That’s Beating Everyone in 2025
By Genevievecjackson@gmail.com
You can keep your AI narratives and crypto memes — the real fireworks this year came from the guys who still read balance-of-payments tables. Equity Management Associates’ GARP Fund just printed a +49% quarter and +131% YTD, riding a trade that everyone else mocked until it started working: gold, silver, and the miners.
While the S&P was patting itself on the back for being up 15%, EMA was busy doubling its investors’ money in nine months.
In a market obsessed with AI, Equity Management Associates just reminded everyone that sometimes the best trade isn’t digital — it’s geological.
The EMA GARP Fund gained a staggering +48.9% in Q3 2025, bringing year-to-date returns to +131.4%, obliterating the S&P 500’s +14.8% and the NASDAQ’s +18%. While the rest of the world was trying to justify Nvidia’s 48× multiple, EMA quietly compounded like a bullion-backed freight train.
Their secret? Owning gold and silver miners while the rest of Wall Street argued whether Powell or Trump controls the Fed. Spoiler: it’s neither — it’s the price of gold.
The Great Debasement Trade
EMA’s managers have been shouting about “monetary debasement” for years, and now it’s finally happening. The letter reads like a manifesto for anyone who ever rolled their eyes at Modern Monetary Theory.
Gold has surged past $4,200/oz, silver’s ripping through $50, and miners — left for dead for a decade — are now the best-performing equities of 2025.
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The fund calls it what it is: “a paradigm shift as the sovereign debt crisis is beginning.”
That’s right — the U.S. isn’t acting like a developed market anymore. With $37 trillion in debt and $1.1 trillion in annual interest expense, we’re now an emerging market with better marketing.
The Macro Doom Buffet
The letter’s macro section reads like a doomsday buffet for fiscal hawks. Every dish is terrible for the dollar and wonderful for gold:
Jobs and credit are cracking. Subprime auto loans are defaulting. Private credit funds are blowing up quietly in the background.
Deficits? $2 trillion a year and counting.
Interest payments? $1.2 trillion — second only to Social Security.
Fed policy? Trump’s calling for 300bps of cuts, Powell’s pretending to have a spine, and new Fed Governor Stephen Miran is out here preaching Yield Curve Control like it’s a TED Talk.
Miran’s actual quote: the Fed should “be active participants in the bond market to bring rates down.”
Translation: QE 5: The Reckoning.
EMA sums it up neatly: “The Federal Reserve is trapped with no good choices.”
When central banks run out of ideas, they print. When they print, gold rallies.
Chart: Fund vs. Market and Metals
Year
EMA GARP Fund
S&P 500 TR
Gold Bullion
Silver Bullion
Notes
2021
-20.4%
+28.7%
-3.6%
-11.2%
Painful prelude
2022
-40.7%
-18.1%
-0.3%
-12.6%
Bloodbath bottom
2023
-3.9%
+24.2%
+13.1%
+8.7%
Base building
2024
+19.2%
+26.3%
+15.7%
+18.2%
The turn
2025 YTD (Q3)**
+131.4%
+14.8%
+47.0%
+61.4%
Gold mania 2.0
Source: Fund letters, Bloomberg. Net of fees.
The Sovereign Debt Crisis: This Time It’s Global
EMA doesn’t sugarcoat it — they call the current cycle a “sovereign debt crisis not seen in 100 years.” The parallels are chilling: post-WWI debt loads, inflation to monetize the unpayable, and the quiet dismantling of monetary credibility.
The letter even invokes 1920s Germany, 1940s Britain, and 1970s America — all episodes where governments “ran the economy hot” to paper over deficits.
Now, Trump’s economic brain trust (Scott Bessent, Stephen Miran, and whoever’s still allowed near Mar-a-Lago) are floating their own “Mar-a-Lago Accord” — a half-serious, half-terrifying plan to restructure global trade and monetary systems via tariffs, devaluation, and debt swaps.
EMA’s take? Welcome to the prequel of Bretton Woods II, now with memes and Bitcoin.
The Math Behind the Madness
At $4,200 gold, the U.S. Treasury’s holdings cover just 18% of the monetary base — less than when Nixon killed the gold standard in 1971.
To hit historical coverage averages (45.7%), gold would need to reach $10,700/oz. In a full-blown monetary panic? Try $30,000/oz.
For context: to fully back M2 money supply, the global gold price would need to be $92,700/oz.
EMA’s point isn’t that we’re headed there tomorrow — it’s that even after a historic rally, gold is still cheap if you believe money printing is forever.
“Our biggest risk,” they write, “is that the U.S. suddenly gets fiscally responsible. Most people chuckle when we say this.”
Miners: The Most Explosive Trade Left
Gold miners have gone from neglected to nuclear. The GDX (majors ETF) is up 125% YTD, GDXJ (juniors) up 132%, and SIL (silver miners) +126%.
But EMA insists this is just the third inning of the game. The miners still trade at 5–8× cash flow, versus 48× for the MAG7.
They even run the math:
A $2,600 → $4,200 gold move = +62% in price
But miner cash flow more than doubles (+133%) because of fixed costs
A company mining 100,000 oz goes from $120M → $280M in free cash
That’s why a name like Avino Silver & Gold is up 607% YTD, not 62%.
EMA’s analysis is old-school, but deadly accurate: fixed cost + rising commodity = rocket fuel.
Developers, Producers, and Drill Stories — the Gold Stock Food Chain
The fund breaks down its portfolio like a mining ecosystem:
Producers (47%) – Cash-flowing mines, mostly small and mid-tier names about to graduate into ETFs like GDXJ.
Developers (41%) – Future producers with giant resource bases and real upside once financing arrives.
Drill Stories (4%) – The “lottery tickets.” Some fail, some 10×.
Bitcoin and Privates (8%) – The digital parallel to gold exposure.
Their poster child for developer alpha is 1911 Gold (AUMB.V) — a forgotten Manitoba mine worth $160 million that sits on $900 million worth of infrastructure.
At $4,000 gold, they’re modeling 10× potential. At $7,000 gold, “we might need a new calculator.”
Silver: The Great Squeeze
Silver’s up 61% YTD and officially in short squeeze territory. Inventories in London are collapsing, borrow rates are the highest since the Hunt Brothers tried to corner the market in 1980, and industrial demand from solar and AI power infrastructure is eating the rest.
EMA’s description: “Silver’s chart technicals are a thing of beauty and poised to rip higher.”
For once, silver bugs might actually be early instead of just loud.
Bitcoin: Quietly Lurking
Bitcoin’s +22% YTD feels almost boring next to gold’s fireworks, but EMA isn’t losing faith. They still see it as “digital gold” and note that institutions are quietly allocating through ETFs.
The team’s long-term bet is that Bitcoin will outperform gold on a lag once the “digital scarcity narrative” catches up to the physical one. They’ve been adding via coins, treasuries, and call spreads on MicroStrategy (MSTR).
Their thesis: Gold moves first, Bitcoin moves faster.
Sit Tight and Get Rich
The letter closes with a Jesse Livermore quote that could double as EMA’s motto:
“It never was my thinking that made big money for me. It was always my sitting. Got that? My sitting tight.”
They know it’s tempting to sell after a 131% year. But they’re not done. As they put it, “We’re only in the third inning of the gold bull market.”
When the world finally realizes its currencies are melting ice cubes, they’ll be the ones holding the hard assets — and sitting very tight.
