The Scottish Mortgage (LSE: SMT) share price has got its game on. Much of that is down to SpaceX. The FTSE 100 investment trust had the foresight to start building a position in Elon Musk’s privately owned interstellar vehicle seven years ago. But is this as good as it gets?
Scottish Mortgage invested a total of $200m in SpaceX between 2018 and 2021. After Friday’s record-breaking IPO SpaceX is now valued at $2.1trn, and Scottish Mortgage’s stake could be worth just shy of $5bn. That’s a return of around 25 times, which is pretty handy.
It’s also a vindication of the trust’s high-conviction investment strategy, which includes targeting private companies. This gives investors access to fast-growing businesses long before they go public. Manager Tom Slater believes a small number of exceptional outliers drive the vast majority of stock market returns. It’s certainly paid off here.
How volatile is this investment trust?
It’s also paid off for Scottish Mortgage shares. They’re up 45% in the last year, and 120% over three. Yet it’s not all fun and games. You see, 2022 was a nightmare for the trust, which crashed by half. The trigger was a sell-off in US technology stocks. That hit every fund in the sector, but Scottish Mortgage was among the hardest hit.
I took advantage of the crunch by adding it to my SIPP in May 2025, and I’m personally up 105%, with dividends on top. As a rule, I prefer to buy stocks when they’re down rather than up. So is Scottish Mortgage flying too high?
Inevitably, it’s pricier than it was, trading at a discount of just 2.27% to underlying net asset value. That compares to its 12-month average discount of 6.94%. It’s also heavily exposed to whatever happens next with SpaceX, which now makes up more than 20% of its total portfolio.
Should you consider this FTSE 100 stock today?
SpaceX shares closed on Friday (12 June) at $160.95, an increase of 19.22% on the original quoted price of $135. Thanks to rules design to curb ‘flipping’, instant profit taking should be kept to a minimum, but could still happen. Hazarding a guess, I’d expect SpaceX to trail downwards over the days ahead, as the novelty ebbs.
Much will depend on wider events. Once again, there’s talk of peace in Iran, and if there’s meaningful progress, it could light a rocket under stock markets generally. Also, there are more high-profile tech IPOs coming our way, notably Anthropic (which Scottish Mortgage holds) and ChatGPT owner Open AI (which it doesn’t). That could keep sentiment simmering nicely, especially if we get evidence that artificial intelligence really will drive a generational leap in productivity. Alternatively there could be no peace, a violent oil price and inflation spike, and the AI bubble could burst.
I’m treading carefully around Scottish Mortgage shares today. But I won’t be selling my stake. The trust aims to build wealth with a long-term horizon, and that’s how it should be. It’s worth considering, but investors might be wiser to drip-feed capital than to chase its shares even higher today.
Should you invest £5,000 in Scottish Mortgage Investment Trust Plc right now?
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Harvey Jones owns shares in Scottish Mortgage.
