Scottish Mortgage Flips the Script: Premium Issuance Signals Renewed Appetite for Growth Trusts

Scottish Mortgage Investment Trust pivots from buybacks to stock issuance at a premium, fueled by a 19x return on SpaceX and the upcoming IPO.

The Scottish Mortgage Investment Trust has long been synonymous with aggressive share buybacks, a strategy deployed to contain the persistent discount to net asset value that plagued the trust for years. But the tide has turned. On Thursday, the trust sold 1.15 million shares from its treasury stock at a roughly 6% premium to NAV, pocketing £17 million in the process. It was the first such issuance in months — and a clear sign that demand for the UK’s best-known growth trust has roared back.

The move marks a strategic pivot. In the financial year to the end of March, Scottish Mortgage repurchased 122.9 million shares for £1.31 billion; not a single treasury share was issued. The stock traded almost continuously at a discount. That dynamic has now reversed. By late May, when the trust reported its annual results, the board acknowledged that the shares had moved from a discount into a premium position. Thursday’s issuance capitalises on that headroom, with the stock trading at around €17.84, within striking distance of its 52-week high of €18.85. Since January, the share price has gained roughly 28%.

SpaceX: The 19-Bagger That Keeps Giving

Behind the trust’s resurgence lies one extraordinary bet. Between 2018 and 2021, Scottish Mortgage poured an estimated £150 million to £200 million into Elon Musk’s SpaceX. Today, that stake is valued at roughly $4 billion — a return of 19 times the original outlay. SpaceX is set to list on the Nasdaq on June 12 under the ticker SPCX, with a targeted valuation of between $1.5 trillion and $2 trillion. Up to 30% of the shares are expected to be offered to private investors.

The trust’s management has signalled it intends to keep the SpaceX position “very large” even after the IPO — a vote of confidence in the space economy as a long-term growth driver. Much of the bullish case rests on Starlink, SpaceX’s satellite-internet subsidiary, which generated $3.26 billion in revenue in the first quarter of 2026, accounting for 69% of the parent company’s total sales. Starlink’s operating profit reached $1.19 billion in the quarter, while SpaceX reported roughly $20 billion in full-year 2025 revenue.

Valuations vary widely. NYU’s Aswath Damodaran puts SpaceX’s fair value at around $1 trillion, while Ark Investment Management sees $1.75 trillion as plausible. For Scottish Mortgage, the IPO represents a liquidity event that allows portfolio rebalancing without reducing its core exposure to space.

Strong Annual Numbers, but the Five-Year Picture Tells a Different Story

The trust’s annual results for the year to March 2026 painted a picture of solid recovery. Net asset value climbed 27.4%, while the share price rose 26.8%, comfortably outpacing the FTSE All-World Index’s 18% gain. The recent momentum was enough to push the trust back to a premium.

But the longer-term record is more sobering. Over five years, the NAV return stands at just 12.8%, compared with 68.2% for the benchmark. Over a decade, however, Scottish Mortgage reasserts its long-term pedigree: a NAV gain of 435% versus the index’s 234%.

The trust also continued its 43-year unbroken dividend streak, raising the annual payout for the 43rd consecutive year.

Premium Pricing Opens Options — and Tests Conviction

The switch from buybacks to issuance is a powerful signal for the closed-end fund sector, where discounts have been stubbornly wide across growth mandates. Scottish Mortgage now has more than 1.1 billion shares outstanding, plus a treasury stock reserve that gives it flexibility to issue more if demand holds — or to resume buybacks if headwinds return.

“The capital management toolkit is fully available,” the trust’s board has indicated. Whether the premium holds depends on the trajectory of the trust’s private-market exposures — SpaceX foremost among them — and the broader appetite for global growth equities. For now, the data suggests investor demand is firmly back. The IPO later this month will be the next major test.