Scottish Mortgage boosted by rise of SpaceX stake – Daily Business

Baillie Gifford manages the Scottish Mortgage Investment Trust

Scottish Mortgage Investment Trust has reported a strong year boosted by its investments in high growth businesses such as Elon Musk’s SpaceX.

The surge in SpaceX’s value means it is the trust’s largest holding “by some margin”, said chairman Christopher Samuel.

“This highlights both the importance of access to leading private companies and the extent to which a small number of exceptional investments can drive long‑term returns,” he added.

The FTSE 100 listed trust, managed by Baillie Gifford, said it continues to focus on long-term growth opportunities, particularly in artificial intelligence and other innovation.

The net asset value (NAV) showed a total return of 27.4% and a share price total return of 26.8%, significantly outperforming the FTSE All-World Index’s 18.0%.

There was a “modest” widening in its discount to 9.5% at the year-end and it has since traded at a premium. It said its financial position is robust, with gearing reducing slightly to approximately 11% and the cost of debt at around 3.6% It is proposing a 4.3% rise in its dividend to 4.57p.

Following the year-end the company’s investment policy was updated to allow for an additional £250 million in private company investments, and ongoing charges remain low at approximately 0.33% with no performance fees.

Elon Musk’s SpaceX is the trust’s largest holding

Mr Samuel said: “This is a modest but important evolution. It ensures that the company is not forced to forgo attractive new or follow-on investment opportunities in exceptional private businesses, while maintaining robust guardrails and oversight.”

He added: “We remain determined that shareholders should keep as much as possible of the returns generated by their investment. Low costs are central to the Scottish Mortgage proposition.

The company’s ongoing charges remain very low at approximately 0.33%, and there are no performance fees. This is particularly important given the breadth of access Scottish Mortgage offers. Few vehicles provide shareholders with exposure to both listed and private growth companies in a single, liquid portfolio. Fewer still do so at such a low cost.

“Private market exposure is often associated with high fees and limited access. Scottish Mortgage provides access to many exceptional private companies through the investment trust structure, many of which are now large, established businesses rather than early-stage ventures, with daily liquidity in the Company’s shares and a fee structure that remains highly competitive.”

Looking ahead, he said: “The environment remains uncertain. Geopolitical tensions, evolving economic policy and structural shifts in markets will continue to influence sentiment.

“In a more fragmented world, supply chains, capital flows and regulatory environments are all in flux, creating both risks and opportunities for global investors.”

The annual general meeting will be held at the National Galleries of Scotland on 2 July.

#Scottish #Mortgage #boosted #rise #SpaceX #stake #Daily #Business