My Self-Invested Personal Pension (SIPP) has been home to a few FTSE 100 stocks down the years, but none has been in there longer than Scottish Mortgage Investment Trust (LSE:SMT).
Excluding dividends, Scottish Mortgage has returned 375% over the past decade, making it the eighth-best-performing Footsie stock over this period.
At the start of June, the share price closed at a record high of 1,545p. And while it’s pulled back to 1,359p since, I have no intention of selling.
Indeed, I intend to keep holding for decades. Here’s why.
What does it do?
Founded in 1909, the investment trust puts money into what it considers to be the world’s most transformative companies. It searches for these globally — including in China and Latin America — and is agnostic as to whether they’re listed or not.
Nowadays, a typical company lists on the stock market after 11 years, up from seven just a decade ago. So the really exciting ones are increasingly staying private for longer, making the ability to invest in unlisted firms all the more valuable.
Not a bug
Recently, the trust has made blockbuster paper gains from SpaceX, which recently had its record-breaking IPO. However, the returns have been so spectacular that SpaceX has ballooned to over 20% of assets.
Cleary, this adds concentration risk because the trust cannot reduce this mammoth holding just yet. It could take another few months to suitably trim back the position due to restrictions on when existing investors can start selling.
Therefore, with SpaceX crashing 41% in the past month, the Scottish Mortgage share price has come under pressure. It’s down 12% from the early June high.
Here’s the thing, though. Volatility isn’t a bug, it’s a feature of this type of investing. Scottish Mortgage has come under pressure plenty of times in the past.
A few years ago, it was Tesla that became a huge position. Fast-forward to today, it isn’t even in the portfolio. Tesla was identified early (2013), generated spectacular returns, and then the managers methodically sold it down, helping to drive shareholder returns.
In other words, it served its purpose. So while the next few months might be rocky because of SpaceX, the existing large position doesn’t worry me too much long term.
Top 10 holdings
| 1 | SpaceX |
| 2 | TSMC |
| 3 | Nvidia |
| 4 | Bytedance |
| 5 | Amazon |
| 6 | Stripe |
| 7 | ASML |
| 8 | MercadoLibre |
| 9 | Anthropic |
| 10 | Moderna |
An investment in the future
The world is changing faster than it has in decades. Scottish Mortgage would rather own the companies driving that change than shelter from it. Artificial intelligence is rewiring the global economy, creating the most important structural shift since the emergence of the internet.
Scottish Mortgage
As mentioned, the trust gives my SIPP exposure to world-class growth companies that I can’t buy myself. These include Stripe, Databricks, Anthropic, Revolut, and innovative AI start-ups in China that I know little about.
So, is the FTSE 100 stock worth considering today? I think so, but I wouldn’t back up the truck. There’s really no need.
Instead, I’d consider buying some shares, topping up whenever it suffers a meaningful dip (as it regularly does), and then leaving the investment to compound over the long run.
Ultimately, Scottish Mortgage is an investment in a future that’s coming at us faster than ever before.
Should you invest £5,000 in Scottish Mortgage Investment Trust Plc right now?
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Ben McPoland own shares in MercadoLibre, Nvidia, Scottish Mortgage, and TSMC.
