At Scottish Mortgage, Dividend Consistency and Private Market Ambition Converge

Scottish Mortgage delivers 43rd consecutive dividend increase while issuing shares at a premium to fund private investments, including a 19% stake in SpaceX.

Scottish Mortgage Investment Trust is writing a dual narrative these days. On one hand, it just delivered its 43rd consecutive annual dividend increase, a feat that cements its status among the Association of Investment Companies’ "Dividend Heroes." On the other, the trust is rapidly expanding its exposure to unlisted companies, riding a wave of share issuance that has pushed its stock to trade at a premium to net asset value for the first time since early 2023.

The board has proposed a final payout of 2.97 pence per share, lifting the full-year distribution by 4.3% to 4.57 pence for the year ending 31 March 2026. The dividend, subject to shareholder approval at the 2 July annual meeting, will go ex-dividend on 11 June with a record date of 12 June and payment scheduled for 10 July. Yet income is hardly the trust’s primary calling card — the total dividend of £49.6m far outstrips the net revenue after tax of £25.6m, and earnings per share came in at just 2.28 pence (up from 1.39 pence a year earlier). The recovery largely reflects a normalisation after last year’s write?off of accrued interest on a Northvolt convertible note.

Premium Pricing Opens the Door to New Capital

What makes the payout story particularly interesting is the context in which it arrives. Scottish Mortgage has been issuing shares from treasury at prices above NAV — a complete reversal from the discount of 2022 and early 2023. On Wednesday alone, 1.15m new shares were placed at 1,502 pence each, following a placement of 1.25m shares two days earlier. The stock has gained roughly 27% since January and now changes hands at a premium, giving management a cheap source of equity to funnel into its private?market ambitions.

That ambition is considerable. The board recently authorised an additional £250m capacity for private?equity investments, raising the headroom within the trust’s 30% limit on unlisted holdings. The move is designed to avoid forced sales when portfolio companies need follow?on funding rounds. In the year to March 2026, £254m was deployed into private names — nearly double the prior year’s figure. New additions include AI developer Anthropic, animal?health specialist Loyal Animal Health and Chinese social?media platform RedNote, while existing positions in Redwood Materials, Enveda and Zipline received top?ups.

SpaceX Juggernaut Drives the Portfolio

The most prominent unlisted holding, however, is SpaceX. The rocket and satellite company now accounts for more than 19% of total assets, and portfolio manager Tom Slater characterises it as a “dual monopoly” — dominant in both launch services and the Starlink broadband constellation, which generates recurring, high?margin revenue. SpaceX sits at the heart of a broader portfolio tilt toward artificial?intelligence infrastructure, digital financial services and health?tech innovation. Management describes the current AI?driven technological shift as a generational reallocation of economic value.

Gearing Comes Down as Debt Costs Stay Manageable

The trust’s balance sheet remains disciplined. Total gearing has fallen to around 11%, from approximately 13% a year earlier, driven by portfolio growth rather than debt reduction. The average cost of borrowing stands at 3.6%. During the financial year, Scottish Mortgage replaced a $300m fixed?rate loan from Scotiabank with drawings under credit lines from ICBC, Bank of New York Mellon and BBVA. After the year?end, an unused $25m revolver and a maturing $180m loan from Royal Bank of Scotland International were replaced by a new $205m one?year facility, of which $180m was drawn immediately. Covenants cap total debt at 35% of adjusted net assets or total assets, tested monthly.

Ongoing charges edged up to 0.33% from 0.31%, reflecting total expenses of £44.9m (excluding finance costs). Management fees are 0.30% on the first £4bn of gross assets (less short?term liabilities) and 0.25% thereafter; no performance fee is levied.

Long?Term Returns Remain the Core Proposition

For all the attention on dividends and private markets, Scottish Mortgage is first and foremost a growth vehicle. Its NAV total return for the year came in at 27.4%, the share price climbed 26.8% and the FTSE All?World Index delivered 18.0%. Over a decade, the NAV return compounds to 435.2%, nearly double the benchmark’s 233.9%. The five?year record is weaker, reflecting a painful stretch for growth stocks and private?market writedowns, but the trust’s ability to generate capital appreciation has never been in doubt.

With total assets of £16.1bn, a premium listing and a 43?year dividend streak intact, Scottish Mortgage is demonstrating that income and innovation can coexist — even if the income remains very much the junior partner.