Baillie Gifford’s Scottish Mortgage Investment Trust faces a structural challenge after its 18.1% stake in SpaceX—valued at £3 billion of the £16.66 billion portfolio—became the single largest holding in the fund. The position, built from an initial £151 million investment in December 2018, has appreciated nearly 20-fold to a March 2026 valuation of £2.98 billion, making it the top contributor to returns over one-, three-, and five-year horizons.
The surge in concentration reflects Scottish Mortgage’s long-standing strategy of early-stage investments in high-growth companies. However, the trust’s exposure peaked at 25% following SpaceX’s Nasdaq debut on June 12, 2026, when the stock surged on its first trading day. Manager Tom Slater acknowledged at the Edinburgh annual meeting that such a concentrated position is unprecedented for the trust, signaling the need to reduce exposure despite the company’s continued growth potential.
The transition from private to public markets introduces new dynamics. SpaceX’s listing eliminates prior valuation opacity but replaces it with daily price volatility that directly impacts the trust’s net asset value. The firm noted this shift could amplify short-term fluctuations in the portfolio’s NAV. Liquidity constraints have also eased: lock-up periods permit Scottish Mortgage to sell up to 20% of its stake starting August 6, with further tranches becoming available over the next six months.
The unwind strategy presents a classic active-management dilemma. While reducing concentration risk, divestment would diminish exposure to a company whose revenue surged 92% to $7.8 billion in Q2 while narrowing its net loss from $1 billion to $541 million. Analysts had expected $6.8 billion in revenue, but investor focus shifted to capital expenditures, which ballooned from $2.83 billion to over $18 billion, triggering a 7% after-hours decline in the stock.
Private markets remain a cornerstone of Scottish Mortgage’s approach, with 23% of assets—£3.83 billion—allocated to 52 unlisted companies including ByteDance, Stripe, and Anthropic. The trust positions itself as a conduit between public and private markets, arguing that the distinction between listed and unlisted holdings is secondary to long-term growth potential. For SpaceX, the IPO marks merely a change of venue rather than the end of its investment thesis, though it now subjects the portfolio to the full force of public-market volatility.
