Scottish Mortgage Delivers 27.4% NAV Return and a 43rd Dividend Hike as Tactical Buybacks Reshape the Trust

Scottish Mortgage Investment Trust reports 27.4% NAV gain, boosts dividend for 43rd year, with SpaceX driving over 19% of portfolio as buybacks narrow discount to near premium.

Scottish Mortgage Investment Trust has extended its dividend increase streak to 43 consecutive years, hiking the payout by 4.3% to 4.57 pence per share even as it posted one of its strongest fiscal performances in recent memory. The combination of steady income growth and double-digit net asset value gains underscores how the global growth-focused vehicle has managed to reward patient equity holders while aggressively repositioning its capital base.

For the year ended 31 March 2026, the trust’s net asset value (NAV) climbed 27.4%, and its share price advanced 26.8% — both easily outpacing the FTSE All-World Index’s 18% gain. Net profit after tax soared to £3.1 billion from £1.2 billion a year earlier, and shareholders’ equity swelled to £13.8 billion. The stock now trades near the levels first reached in November 2021, a remarkable recovery after the growth sell-off of 2022.

The primary engine of that outperformance was the trust’s outsized position in SpaceX. The Elon Musk-led rocket and satellite communications company swelled to more than 19% of the portfolio by year-end, driven largely by the soaring valuation of its Starlink broadband unit. After the fiscal year closed, SpaceX reportedly filed paperwork for an initial public offering. Scottish Mortgage’s broader private equity sleeve made up 27.1% of total assets, with healthcare innovation, AI infrastructure and digital financial services providing the public-market exposure.

Management has also used a hefty share buyback programme to narrow the persistent discount to NAV. Since March 2024, the trust has repurchased more than £2.5 billion of its own shares — surpassing the original two-year target of £2 billion. The discount, which stood at 23% in mid-2023, had shrunk to 9.5% at the end of the fiscal year and has since turned into a modest premium. The board has committed to continuing the buybacks to smooth out discount volatility.

In a further move to preserve flexibility, the trust adjusted its investment policy following a shareholder vote in April 2026. While the 30% cap on unlisted holdings remains the benchmark for portfolio management, an additional buffer of up to £250 million has been introduced. This allows the vehicle to keep private equity stakes even when valuation gains push them above the threshold, preventing forced sales at inopportune moments.

Operating costs remain lean at 0.33% of net assets, and leverage declined to roughly 11%, with average borrowing costs of 3.6%. North America accounts for 55.7% of the portfolio, reflecting the trust’s heavy tilt toward US growth stocks and private companies. The final dividend of 2.97 pence per share is due for payment on 10 July 2026.

The shares closed at €17.62 on Thursday, down 1.4% on the day, but have been as high as €17.66 recently — roughly 9.75% above their 50-day moving average. The 52-week peak of €18.85 was set on 25 May. Since the start of the calendar year, the stock has gained nearly 27%, almost exactly matching the NAV return.

Management points to a more than doubling of free cash flow among the portfolio’s underlying holdings as evidence that investee companies have adapted to higher interest rates. The next test of that momentum will come with the half-year report, which will show whether the strong fiscal year has carried over into the current period. For now, Scottish Mortgage offers a rare blend of record NAV growth, a three-decade-plus dividend record, and a capital management strategy that has all but erased the valuation gap that once dogged the trust.