Scottish Mortgage Caught Between Rate Fears and SpaceX Catalyst as AGM Looms

Scottish Mortgage Investment Trust is entering a pivotal period, with a brutal selloff in growth stocks triggered by hotter-than-expected US jobs data colliding head-on with two of the most consequential corporate events in its recent history: the SpaceX initial public offering on June 12 and the annual general meeting on July 2. The trust has shed nearly 7% in the past seven days, sliding to €16.75 on Monday, as markets rapidly repriced the odds of further Federal Reserve rate increases.

The catalyst came on Friday, when the US economy added 172,000 jobs in May — almost double the consensus forecast. That sent the probability of a Fed rate hike in December 2026 soaring from 45% to over 80%. Technology stocks, acutely sensitive to rising capital costs, bore the brunt: the Nasdaq tumbled 4.18% on the day, while the Philadelphia Semiconductor Index cratered 10.3%. Scottish Mortgage, with its heavy tilt toward high-growth, high-valuation names, was squarely in the crosshairs. The selloff cascaded into Asia on Monday, with South Korea’s KOSPI plunging more than 8% in the first 20 minutes, triggering a circuit breaker.

Despite the rout, the trust is holding just above its 50-day moving average of €16.62. It now trades 14% below the 52-week high of €19.50 set on May 25. The relative strength index sits at 43.7, neutral territory with no clear oversold signal. Further pressure came from a 4.44% jump in Brent crude to $97.22 a barrel and a rise in the 10-year US Treasury yield to roughly 4.58%, the highest in two weeks. Geopolitical tensions in the Middle East added to the risk-off mood.

Yet for all the macro noise, the micro picture is dominated by two events that could redefine the trust’s trajectory. SpaceX, Scottish Mortgage’s largest holding at 21% of the portfolio, is slated to go public on June 12 with an estimated valuation of $1.75 trillion. Roughly 30% of the offered shares have been set aside for retail investors. The listing will give a market price to a position that has been notoriously difficult to value, and Baillie Gifford has already raised its internal SpaceX valuation three times in six months. How the market prices the stock will feed directly into Scottish Mortgage’s net asset value.

Should investors sell immediately? Or is it worth buying Scottish Mortgage Investment?

Four weeks later, on July 2, shareholders gather at the National Galleries of Scotland in Edinburgh to vote on a proposal to lift the 30% cap on unlisted holdings. Managers Tom Slater and Lawrence Burns argue that the ceiling is too restrictive as several large private bets approach potential liquidity events. A vote in favour would give them the room to participate in late-stage funding rounds without being forced to dilute existing positions. The AGM will also consider a buyback authorisation of up to 14.99% of outstanding shares — but it can only be exercised when the trust trades below NAV. That is a meaningful condition, given that Scottish Mortgage currently commands a premium of around 8%, a dramatic swing from the roughly 20% discount it carried just months ago.

The premium has been hard-won. In the fiscal year to March 2026, NAV rose 27.4% and the share price delivered a total return of 26.8%. Over a decade, NAV has compounded at 435%, nearly double the FTSE All-World’s 234%. The trust also proposed a final dividend of 2.97 pence per share, bringing the full-year payout to 4.57 pence — a 4.3% increase and the 43rd consecutive year of dividend growth. That streak, combined with the impressive NAV performance, has made Scottish Mortgage a favourite among UK retail investors. Interactive Investor ranked it the most-bought investment trust for the third month running in May.

Meanwhile, the broader investment trust sector is showing signs of a structural shift. According to the Association of Investment Companies, the average discount to NAV across the industry fell to 9.6% at the end of May — the first time it has dipped below 10% in nearly four years. That suggests a broad re-rating is under way, even if Scottish Mortgage itself is now trading at a premium.

Scottish Mortgage Investment at a turning point? This analysis reveals what investors need to know now.

The board has also updated its risk framework, removing macroeconomic, geopolitical and regulatory factors as standalone categories and reclassifying them as amplifiers of existing investment and operational risks. Cybersecurity has been added as a new category, rated “moderate and rising,” while financial risk remains “high but stable,” driven largely by the growing concentration around SpaceX.

For now, the near-term path depends on two unknowns: whether the market’s rate fears will keep growth stocks under pressure, and whether the SpaceX IPO and AGM vote will reinforce the premium or puncture it. The trust’s resilience over the past year — a 21% gain in euro terms — suggests it still has conviction behind it, but the next few weeks will test that faith.

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