Scottish Mortgage’s New Equation: Millennial Demand Meets a £3 Billion SpaceX Windfall

Scottish Mortgage issues shares at 6.5% premium as millennial investors pile in for SpaceX and unlisted tech, reversing two years of discounts.

Scottish Mortgage Investment Trust has executed an abrupt about-face. After spending roughly £3 billion on share buybacks over the last two years to prop up a depressed stock price, the Baillie Gifford-run trust is now doing the opposite — issuing new shares at a premium to net asset value. On 22 May 2026 alone, it placed 2.25 million shares at 1,496.62 pence apiece, pocketing nearly £34 million.

The shift reflects a dramatic change in investor sentiment. The shares have rallied about 36% since the start of the year, touching 1,500 pence in London — the highest level since late 2021 — and now trade at a 6.52% premium over NAV. That marks a complete reversal from the discount that had dogged the trust for the previous two years.

Millennials are the driving force behind this newfound enthusiasm. According to an Invesco study, 55% of British 25-to-34-year-olds intend to invest in investment trusts, compared with just 9% of those over 65. The ownership structure of Scottish Mortgage reflects that tilt: institutions hold only 8.6% of the shares. By contrast, the comparable trust 3i Group has 63.6% held by institutional investors. This rally is a retail phenomenon.

Why are younger investors piling in? The trust offers access to unlisted tech giants that are otherwise out of reach for ordinary buyers. Companies like SpaceX, ByteDance, and Anthropic make up around 40% of the portfolio, and they have become the principal attraction.

SpaceX is the biggest draw. The trust’s stake has ballooned from 0.6% of assets in 2019 to 19.3% today. An initial investment of £151 million has blossomed into roughly £3 billion — a gain of about 1,900%. Scottish Mortgage values the SpaceX holding based on a company valuation of $1.25 trillion, but the private space venture has filed detailed financial documents with the SEC, widely seen as a precursor to a Nasdaq listing. The IPO is expected around 12 June 2026 at a valuation of up to $1.75 trillion.

The numbers underneath are less pristine. SpaceX generated approximately $18.7 billion in revenue in 2025, but it posted a net loss of $4.27 billion in the first quarter of 2026 as it pours cash into next-generation rockets and AI infrastructure. The trust’s other unlisted bets — Stripe and ByteDance — could also go public, providing further revaluation catalysts.

Listed holdings are adding to the momentum. Scottish Mortgage’s portfolio includes Nvidia, ASML, and Taiwan Semiconductor, all beneficiaries of the artificial-intelligence infrastructure buildout. Nvidia’s latest quarterly revenue of $81.6 billion handily beat market expectations, reinforcing the AI narrative that underpins the trust’s strategy.

Shareholders have given management even more room to ride this wave. An extra £250 million has been approved for investments in unlisted companies, even if that pushes the allocation above the previous 30% ceiling. The trust’s focus on growth over income is underlined by the proposed final dividend of 2.79 pence, which yields a paltry 0.32%.

There are risks. Nearly 60% of the trust’s assets are tied to the US market, which makes it sensitive to American economic data due this summer. And the UK’s Financial Conduct Authority flagged 1,267 illegal financial advertisements in April, many targeting the very young investors now pouring into the trust. When euphoria outruns fundamentals, a premium can quickly become a burden.

The next test comes on 2 July 2026, when Scottish Mortgage holds its annual general meeting in Edinburgh. Before that, the SpaceX IPO will determine whether the current 6.52% premium is justified — or whether it has overshot the mark.