The Church of Jesus Christ of Latter-day Saints lost $12.1 billion — so far — in 2022 in its most prominent investment portfolio as turmoil continued to rock economies around the world.
New reports indicate the huge account managed by the faith’s investment arm, Salt Lake City-based Ensign Peak Advisors, dropped by $1.8 billion in value during the third quarter to $40.3 billion as of the end of September, its third consecutive quarterly decline.
(Christopher Cherrington | The Salt Lake Tribune)
Volatile markets since January reduced the church’s vast portfolio of stocks and mutual funds to where it was in fall 2020 as it was rebounding from a pandemic plunge. Its worth climbed from a three-year low of $29.9 billion seen in early 2020 to a peak of $52.3 billion in late 2021, before heading decidedly downward in 2022.
The account shed $3.1 billion in the first three months of 2022, followed by a $7.1 billion drop in April, May and June and $1.8 billion dip in July, August and September, according to the latest disclosures filed with the U.S Securities and Exchange Commission.
That put the portfolio down 4.3% for the most recent quarter, compared to a 6.2% slide for the Dow Jones Industrial Average.
The church investments have seen a 23% decline for 2022 as of September, faring a little worse than the blue-chip-oriented Dow, down 21% over the same period, as global investors reacted to record-high inflation, U.S. interest rate hikes, layoffs by major technology companies and the ongoing war in Ukraine.
Those 2022 losses for the Utah-based faith’s portfolio aside, the fund remains $10.4 billion ahead of its low in early 2020 with the U.S. onset of COVID-19.
‘Rainy day’ account invested for church purposes
The fund began reporting to federal regulators in early 2020, a few months after a former Ensign Peak fund manager 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 yearly income to the 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 faith 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 do not invest in industries that faithful Latter-day Saints consider objectionable, including alcohol, tobacco, coffee and gambling. Notably, of 30 large stocks that compose the Dow Jones Industrial Average, Ensign Peak has never invested in Coca-Cola, for instance, even though consuming drinks such as Coke, Pepsi or Dr Pepper doesn’t violate the faith’s Word of Wisdom health code.
Otherwise, Ensign Peak’s quarterly reports to federal regulators suggest it operates much like other broadly based, professionally managed portfolios of stocks and mutual funds
Dominated by tech, financial stocks
Ensign Peak’s first disclosure to the SEC, filed in February 2020, showed the fund held $37.8 billion just before the pandemic. Ten quarterly disclosures since then reveal the portfolio’s performance beating those of wider market metrics about half the time.
Reports also indicate fund managers spreading investments significantly with each subsequent quarter, diversifying from 1,622 stocks and mutual funds in early 2020 to 2,310 in the latest report for 2022.
Topping its list of holdings are stakes worth over $1 billion each in Apple, Microsoft and Amazon, at $2.6 billion, $1.9 billion and $1 billion, respectively. The fund also holds two types of shares in Alphabet Inc., parent company of search engine giant Google, for a total investment in that company of $1.29 billion.
Add in the portfolio’s $448.6 million in shares of Meta Platforms, parent of social media behemoth Facebook, and those five companies make up nearly 17% of its total worth.
Half the account’s total value is now held in those tech stocks and 34 other holdings, with companies such as UnitedHealth Group, Johnson & Johnson, Exxon Mobil, Tesla, Mastercard and Morgan Chase leading that roster.
The account also holds shares in an array of mutual 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 holds shares in a large number of foreign firms and in several funds dedicated to investing in companies in specific countries, including India (where the church is building a temple) and Saudi Arabia.
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