LDS Church investments bounce back, shoot up by $4.1B after three straight quarterly losses

The most prominent investment portfolio of The Church of Jesus Christ of Latter-day Saints grew by $4.1 billion as 2022 drew to a close.

Newly filed reports valued the huge account managed by the faith’s investment arm, Salt Lake City-based Ensign Peak Advisors, at $44.4 billion at the end of December. That uptick reversed three consecutive quarters of declines that had seen the church’s holdings fall from $52.3 billion at the end of 2021 to $40.3 billion as of September.

Details on that end-of-year rebound emerged as the U.S. Securities and Exchange Commission announced Tuesday that the worldwide church and Ensign Peak had agreed to pay a total of $5 million in penalties for failing to disclose the full scope of past holdings and for creating shell companies that obscured those investments and church control over them.

Disclosures from 2022 show Ensign Peak lost $3.1 billion in the first three months of the year, followed by $7.1 billion in April, May and June and $1.8 billion in July, August and September. The fund of U.S. stocks, mutual funds and foreign equities then surged 10.3% in the final quarter as volatile markets bounced back over signs that soaring inflation may have peaked.

Tech, health care and financials top the list

The account fell short, though, of a 16% overall gain in the same quarter for the Dow Jones Industrial Average. October, November and December also saw Ensign Peak fund managers pare back significantly on the account’s overall holdings, eliminating nearly 524 stocks and mutual funds and redistributing around $1 billion to existing stocks.

Technology giant Apple remains the portfolio’s largest single stock, with shares worth at $2.03 billion, and one of four in Ensign Peak now topping $1 billion, with Microsoft, at $1.96 billion, and two types of shares in Alphabet, the parent company of Google, together totaling $1.2 billion.

UnitedHealth Group, at $1.04 billion, is the portfolio’s largest nontech stock.

Other big holdings include Exxon Mobil Corp.; Johnson & Johnson; Amazon; Mastercard; JPMorgan Chase; Walmart; and Merck & Co. — all with stakes of at least $500 million or more.

The church investments remain 48.65% ahead of their pandemic low in the first quarter of 2020, when the fund plunged to $29.9 billion as global investors reacted to the COVID-19 pandemic.

‘Rainy day’ account invested for church purposes

The Ensign Peak fund began reporting to federal regulators in early 2020, a few months after a former fund manager for the firm accused the church in an IRS whistleblower complaint of amassing up to $100 billion in reserve funds from surplus tithing that had been intended for, but not spent, on charity.

Devout Latter-day Saints pay a tenth of their annual income to the worldwide church in tithing, and the faith’s leaders have said publicly and in court documents they deem those funds sacred.

Church officials portray the Ensign Peak fund as a “rainy day” account — kept along with other investments, church-owned businesses and extensive landholdings — to buffer the global religion of 16.8 million members from economic downturns and to help pay for its ministerial, philanthropic, educational and missionary works around the world.

The church has said Ensign Peak’s managers avoid investments in industries that faithful Latter-day Saints consider objectionable, including alcohol, tobacco, coffee and gambling. Otherwise, its quarterly reports to federal regulators suggest it operates much like other broadly based, professionally managed portfolios of stocks and mutual funds.

The account also holds shares in an array of funds dedicated to investing in companies in specific sectors of the economy, including technology, communication services, energy, financials, real estate, regional banks, discretionary consumer products, consumer staples, health care, industrial firms, utilities and materials producers.

It also has shares in a large number of foreign firms and those focused on investing in companies in specific countries, including India (where the church is building a temple) and Saudi Arabia.