How the LDS Church made $22B during the pandemic

After a drop in the third quarter, Ensign Peak Advisors’ portfolio bounced back to end the year with a total value above $52 billion.

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The Church of Jesus Christ of Latter-day Saints closed out 2021 and all those crazy stock market swings with an $8.2 billion gain to its portfolio over the previous year.

New Securities and Exchange Commission filings show the church account of stocks and mutual funds managed by its Salt Lake City-based investment firm, Ensign Peak Advisors, wrapped up last year worth $52.3 billion — nearly $22.4 billion higher than at the onset of the coronavirus pandemic.

The church-owned fund had dipped by 3.2% in the third quarter of 2021, for a loss of $1.59 billion, amid worldwide pandemic-induced volatility.

But it came zooming back with a fourth-quarter gain of 9%, besting the Dow Jones Industrial Average over those same three months by almost 1.2 percentage points.

That performance added another $4.3 billion in total value to Ensign Peak in just one quarter, lifting it to its highest level since late 2019, when the investment firm first began reporting its holdings to federal regulators.

The increase represents a 9% gain from the prior quarter and compares to 7.8% gain on the Dow Jones Industrial Average for the same period.

In December 2019, a former Ensign Peak fund manager, David Nielsen, filed a whistleblower complaint with the IRS, accusing the church of amassing up to $100 billion in reserve funds from excess tithing intended for — but not spent on — charity, in potential violation of tax laws.

To date, the IRS has given no public indication it is acting on the complaint. Shortly after Nielsen’s disclosures, the once-secretive fund filed its first report to the SEC, pegging its value at $37.8 billion in late 2019.

Publicly and in court documents, church leaders have portrayed Ensign Peak as a “rainy day” account to help the global faith of 16.6 million members navigate economic downturns and fund its operations around the world.

Last quarter also saw Ensign Peak dramatically expand the diversity of its holdings, with the portfolio now boasting 2,198 different stocks and mutual and index funds — nearly 350 more than the prior quarter.

Even so, the fund remains heavy with technology stocks, dominated by what is now a $10.3 billion stake, spread among behemoths Amazon, Apple, Facebook, Google and Microsoft.

Apple is still Ensign Peak’s single largest holding, at $2.9 billion, followed closely by Microsoft, at $2.8 billion.

For comparison, Ensign’s shares in the five top tech companies were worth a combined $5.2 billion in early 2020. Amazon, Apple, Facebook, Google and Microsoft now represent just shy of 20% of the portfolio’s total worth, up from 14.6% in late 2019.

The fund’s five largest nontech holdings last quarter were UnitedHealth Group, at $784 million; JPMorgan Chase, $760 million; Home Depot, $655 million; Johnson & Johnson, $546 million; and Thermo Fisher Scientific, at $537 million.

Documents show Ensign’s managers bought 118,380 additional shares in Tesla last quarter, upping their position from $462.7 million to $755.7 million in the U.S. electric vehicle and clean-energy firm.

They have not resumed their forays into so-called meme stocks such as GameStop; Bed, Bath & Beyond and Blackberry, plays that earned them big money in the past.

The fund made headlines in May, when its stake in video game retailer GameStop exploded from $867,000 to $8.7 million in a matter of months as part of social-media-driven speculation. It also rode Bed, Bath & Beyond and Blackberry for millions in additional gains but later sold all three.

The latest SEC report shows that even as Ensign expanded into hundreds of additional stocks and investment funds last quarter, it continues to steer clear of those three offerings.