Scottish Mortgage Rides Dual Tailwinds as SpaceX and Joby Aviation Fuel Investor Demand

Scottish Mortgage Trust issues shares for first time in years after 12-point swing from discount to premium, fueled by SpaceX's 30% portfolio weight and Joby Aviation's FAA certification progress.

A dramatic shift in market sentiment has propelled Scottish Mortgage Investment Trust to new heights, with the closed-end fund capitalising on surging demand by issuing fresh shares for the first time in years. The move underscores a remarkable turnaround for a vehicle that spent much of the recent past buying back its own stock to prop up the price.

The trust placed nearly 3 million shares from its treasury at 1,408.42 pence each, a transaction that would have been unthinkable just twelve months ago when the shares traded at an average 8% discount to net asset value (NAV). Today, the stock commands a 4% premium — a swing of 12 percentage points that reflects a fundamental re-rating.

That optimism was on full display on Monday, when the shares hit a fresh 52-week high of €17.24 (or 1,720 pence in London trading), extending year-to-date gains to roughly 24%. The rally marks a stunning recovery from the trough touched in November 2025.

SpaceX remains the portfolio's heavyweight champion, accounting for 19.3% of total assets as of late March. Market observers now estimate the holding could represent nearly 30% of the fund's value, driven by an external transaction that boosted the private rocket company's valuation. For investors seeking exposure to Elon Musk's space venture before any potential initial public offering, Scottish Mortgage offers one of the few available windows.

But the trust's ambitions extend beyond the stratosphere. Joby Aviation's successful test flights between JFK Airport and Manhattan — a 15-minute journey that would typically take over an hour by road — have provided a timely narrative boost. The electric air taxi developer, which counts Scottish Mortgage among its backers, is pursuing full certification from the US Federal Aviation Administration and aims to launch commercial passenger services in the second half of 2026.

The fund's broader bet on next-generation transportation also includes Aurora Innovation, which is developing autonomous trucking systems. Strategic partnerships with Delta Air Lines and Uber are expected to integrate these flying taxis into existing transport networks, adding credibility to the commercial rollout.

Shareholders have given management a powerful new tool to pursue these opportunities. At the recent annual general meeting, over 99% of votes cast supported expanding the trust's capacity for private investments by £250 million. The additional firepower becomes available once unlisted holdings exceed 30% of total assets — a threshold that looks increasingly likely given SpaceX's growing weight in the portfolio.

This flexibility allows the investment team to continue backing high-growth private companies even as the public market re-rating pushes existing holdings higher. The strategy paid off handsomely in the financial year through March 2025, when the portfolio delivered an 11.2% return — more than double the FTSE All World index's approximate 5% gain.

The concentration risk is impossible to ignore. With SpaceX alone potentially accounting for nearly a third of assets, the trust's fortunes are increasingly tied to the valuation of private giants and the trajectory of the global artificial intelligence cycle. Major holdings in TSMC and Nvidia provide some public market exposure, but the SpaceX weighting creates a single-stock dependency that would make many fund managers uncomfortable.

Investors will get a clearer picture of the portfolio's composition when the trust publishes its next update, expected around May 10. The next annual general meeting is scheduled for Edinburgh in July 2026, by which time Joby Aviation's operational milestones and any further SpaceX valuation moves will likely dominate the conversation.

For now, Scottish Mortgage has executed a remarkable strategic pivot — from defensive buybacks to opportunistic share issuance — as the market finally rewards its long-term bets on disruptive technology. Whether that premium can hold depends on the private companies delivering on their sky-high promises.