Scottish Mortgage Rides SpaceX to 27% NAV Gain, Shifts from Buybacks to Share Issuance

Scottish Mortgage Investment Trust posts 27.4% NAV gain, driven by SpaceX's 19% portfolio weighting and Starlink growth, with a rumored IPO reshaping market sentiment.

Scottish Mortgage Investment Trust delivered a blistering annual performance, with its net asset value surging 27.4% in the year to March 31, 2026 — nearly ten percentage points ahead of the FTSE All-World index’s 18% return. The total shareholder return hit 26.8%, powered by a single holding that now commands almost a fifth of the entire portfolio.

That holding is SpaceX, valued at close to £3bn and representing more than 19% of assets under management. The private-spacefaring giant, propelled by its Starlink satellite business, has become the trust’s largest position by a wide margin. Starlink added 4.6 million new customers in 2025 to reach nine million subscribers across 35 new countries, turning SpaceX into what manager Tom Slater describes as a “dual monopoly” — dominant in launch services and a global communications network with software-like margins.

Slater is under no illusions about the concentration risk. He openly acknowledges the “unusual” weighting and the “potential volatility” it creates for the trust’s NAV. Yet the strategy is deliberate: Scottish Mortgage invested roughly £150m into SpaceX originally, and the stake has appreciated 179% over the past financial year. With a rumoured IPO roadshow kicking off as early as June, the trust is firmly committed to holding through the listing and beyond. “An IPO changes where shares are traded, not the opportunity or our reasons for owning them,” Slater said in the annual report.

The approaching IPO has already reshaped market sentiment toward Scottish Mortgage’s own stock. At the end of March, the shares traded at a 9.5% discount to NAV. By May that discount had flipped into a slight premium. The trust moved quickly to capitalise: on May 11 it issued 600,000 fully paid treasury shares at 1,428.50 pence each — above the prevailing NAV. The issuance, rather than the buyback programme that had been in place, reflects a management team that now sees demand outstripping supply at a fair price.

City broker Winterflood estimates the SpaceX listing could add a further seven percent to Scottish Mortgage’s NAV once the shares trade publicly. Uncertainty remains over whether the trust will be subject to a standard six-month lock-up period for pre-IPO investors; Slater has said the matter has not yet been resolved.

Beyond SpaceX, Slater pointed to a pipeline of other unlisted holdings that could go public in the coming years. He named Anthropic, Databricks, ByteDance and Stripe as “realistic candidates”, describing them not as early-stage punts but as multi-billion-dollar companies with substantial revenues and profits. Scottish Mortgage funnelled £254m into private companies during the year, nearly double the £132m invested the previous year. AI, digital finance and healthcare innovation remain the core strategic pillars.

Operationally, the trust keeps costs tight. The ongoing charges ratio ticked up slightly to 0.33% (from 0.31% a year earlier), performance fees remain absent, and gearing was trimmed to 11% from 13%. Net revenue soared to £3.10bn from £1.22bn, with capital gains of £3.08bn. The proposed final dividend of 2.97 pence per share — subject to shareholder approval at the annual general meeting in Edinburgh on July 2 — is scheduled for payment on July 10.

Scottish Mortgage’s latest results tell a story of concentrated conviction rewarded, tempered by the discipline to manage both risk and market mechanics. The shares now trade around 17.91 euros, just off their 52-week high, and the transition from discount to premium issuance marks a clear vote of confidence in the trust’s unconventional path.