Right now, investors are highly focused on the upcoming SpaceX IPO (scheduled for 12 June). They’re also eagerly awaiting details on the Anthropic IPO (likely to be later this year).
The thing is, UK investors don’t actually have to wait for the IPOs to get access to these growth businesses. Here’s a look at how to get portfolio exposure today.
Access to the world’s most exciting private companies
The Scottish Mortgage Investment Trust (LSE: SMT) is a growth-focused product that mainly invests in publicly-traded companies. However, it also has exposure to private companies.
Looking at its holdings today, it has positions in both SpaceX and Anthropic. It’s also invested in a ton of other exciting private companies such as Databricks (a major rival to data firm Snowflake), Stripe, and Revolut.
Now, the Anthropic position here is quite small (only about 1% of the trust’s portfolio). It’s a different story for SpaceX though. As of the end of April, this was about 18% of the portfolio.
I suspect the weighting is even larger today, because I don’t think the NAV calculation at 30 April would have been using the $1.8trn valuation that’s being talked about today for SpaceX.
Either way though, it’s a large holding. If an investor puts money into this trust, they are getting substantial exposure to SpaceX.
Worth a look?
So is the trust worth including in a diversified portfolio? I think so. I’ve already highlighted some of the private companies in the portfolio. The publicly-traded companies are just as exciting.
Some names worth highlighting here include Nvidia, Taiwan Semiconductor, Amazon, ASML, MercadoLibre, and Ferrari. I’m bullish on all of these stocks for one reason or another.
It’s worth noting that the trust has built the portfolio around a number of transformative long-term themes. These include AI and compute, emerging technologies, the evolution of transport, and the digitalisation of finance.
Impressive track record
Another thing to like about this product is the track record. While Scottish Mortgage had a huge pullback in 2022 when interest rates rose (which is a risk in the future), long-term performance has been very strong.
Over the last 10 years, for example, the trust’s share price has climbed from around 260p to 1,540p. That represents an annualised return of about 20%, which is a far better return than indexes like the FTSE 100 have generated (the FTSE 100’s 10-year return is somewhere around 7%).
Of course, there are no guarantees that future performance will be good. As risk warnings always say, past performance isn’t an indicator of future returns.
But sized properly, I believe this trust can play a valuable role in an ISA or Self-Invested Personal Pension (SIPP) (I hold it in my portfolio) and is worth a closer look. The fact that it offers exposure to the likes of SpaceX and Anthropic is a major attraction.
Should you invest £5,000 in Scottish Mortgage Investment Trust Plc right now?
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Edward Sheldon owns shares in Scottish Mortgage Investment Trust, Nvidia, Amazon, ASML, and Snowflake
