After a turbulent five-year period post-pandemic, Scottish Mortgage has recovered its losses and is now trading near all-time highs. SpaceX deserves much of the credit, but is there more to come? Josef Licsauer, investment trust research analyst at Kepler Partners, takes a look in our latest Investing Analyst column.

Few investment trusts have divided opinion quite like Scottish Mortgage.

For its believers, it’s the closest thing the investment trust world has to a visionary – a £17billion portfolio backing some of the world’s most innovative and disruptive companies, both public and private, delivering almost twice the returns of the global equity market over the past decade.

For its critics, its post-pandemic slump, falling almost 60 percentage points behind the global market over five-years, provided ample ammunition for the ‘I told you so’s’.

Over this period, Scottish Mortgage saw its discount widen to almost 23 per cent, shifting the narrative from triumph to cautionary tale.

That tale of two halves reached a new chapter this May, however, as Scottish Mortgage shares hit an all-time high, completing a recovery that tested investor patience for the better part of five years.

And over the year to 2 July 2026, Scottish Mortgage has delivered NAV and share price total returns of 39.2 per cent and 45.3 per cent, respectively, outpacing the global market’s return of 29.1 per cent, a welcome reprieve for longstanding investors.

Whilst a number of Scottish Mortgage’s public investments have done well, much of that recovery has been driven by developments in the private portfolio, none more so than SpaceX.

The SpaceX effect

The story of Scottish Mortgage and SpaceX is one about conviction and time.

Baillie Gifford first invested in December 2018, valuing the company at $31billion. Seven-and-a-half years later, on 12 June 2026, SpaceX completed the largest IPO in history, raising $75billion and listing at a valuation of $1.77trn.

That scale-up was so strong that SpaceX’s growth, prior to its listing, pushed Scottish Mortgage’s exposure to private companies above its self-imposed 30 per cent limit, prompting shareholders to approve a temporary £250million increase to the unlisted budget.

In the lead-up to SpaceX’s IPO, investor sentiment toward Scottish Mortgage improved dramatically, with the shares moving to a premium to NAV of around 8 per cent toward the end of May, having spent years at a double-digit discount.

Since listing, the initial excitement has cooled. SpaceX climbed to $225 in its first few days before falling back to $162 as we publish.

That decline from the early peak may have fed into Scottish Mortgage’s share price falling 7 per cent in June and Scottish Mortgage shifting back to a discount of 10 per cent, which has now narrowed to 7 per cent.

The post-listing frenzy was, it seems, driven largely by sentiment, with few wanting to miss out on the SpaceX story but the market has since taken a more considered view.

Starlink, its satellite division, is the standout, surpassing 10 million subscribers across 155 countries by early 2026 and generating $11.4billion of SpaceX’s total $18.7billion revenues in 2025. The other divisions, notably, launch and AI, are not yet profitable – a reminder that much of the listing valuation remains a bet on future potential rather than present earnings.

Expectations are extraordinarily high, and that cuts both ways. Underdeliver and the shares will be punished. Meet them and SpaceX may face the same paradox Nvidia has encountered: strong results greeted with a shrug.

With lock-up restrictions releasing shares in tranches through to December 2026, volatility looks likely either way.

None of that diminishes what Scottish Mortgage achieved. Backing SpaceX at $31billion and holding through the trust's most difficult years delivered one of the most remarkable private market returns of the era but crucially, the opportunities extend far beyond.

To Anthropic and beyond...

Scottish Mortgage owns stakes in over half the world’s ten most valuable private companies, and the pipeline beyond SpaceX is compelling.

Anthropic, first backed in August 2025 at a valuation of $183billion, is building what many consider the leading frontier AI model for the workplace, growing revenues from almost nothing in late 2022 to an annualised rate of $47billion by May 2026.

Anthropic has now confidentially filed its IPO, at a pre-IPO valuation of nearly $1trn and represents another extraordinary growth story unfolding inside the portfolio.

Then there’s Revolut. Having secured its UK banking license, the fintech provider now serves over 70 million customers globally, with one in three new European bank accounts opened with Revolut. That licence transforms a business into one that can now fully capture banking economics: deposits, credit, loans and in time potentially mortgages.

Scottish Mortgage’s private team valued it at around $45billion at time of purchase; it now sits around $115billion.

There are also less well-known names worth highlighting. Founded in 2019, Enveda is a biotechnology company drawing on AI to mine the chemistry of the natural world for new medicines, with 12 drug candidates currently in development. Whilst small in comparison, valued at around $1billion at the end of 2025, it has come a long way from a $150k grant to raising over $500million in capital, further illustrating the growth potential running through Scottish Mortgage’s private book.

Not every private investment has paid off. Northvolt, once a significant holding and play on European battery capacity, was written down to zero after scaling challenges proved insurmountable.

Scottish Mortgage’s managers have reflected candidly and refined their private company selection process, but it remains a meaningful reminder of the risks inherent in backing early-stage companies.

Has Scottish Mortgage still got legs?

Many will sit on the fence on this one and I understand why. But asked directly, my answer is yes, Scottish Mortgage still has legs.

SpaceX has delivered beyond many expectations but yet its success may be the very thing clouding investors’ vision on what could be next.

Whether it be the likes of Anthropic or a smaller hidden gem like Enveda, the potential does not stop at SpaceX, as the private book contains both established high-growth names and earlier-stage companies that could yet deliver the next extraordinary return.

Further, at a 7 per cent discount and an ongoing charge of 0.31 per cent that is unmatched in the sector, those who missed Scottish Mortgage’s last double-digit discount may well be looking at this moment as a second chance.

That said, the risks are real and worth stating plainly. Scottish Mortgage’s own history, notably the past five-years, shows just how painful performance can be if things go wrong.

And beyond its own volatility, the trust remains at the mercy of forces that have little to do with whether a company is doing well.

A single statement from Washington can send global equities sharply in either direction and escalating geopolitical tensions, alongside shifting inflation and rate expectations, can reprice entire sectors seemingly overnight.

For a high-conviction, concentrated portfolio like Scottish Mortgage, that kind of volatility can be particularly acute.

For patient, long-term investors who understand what they are buying, Scottish Mortgage offers a genuinely differentiated way to access the companies and themes that could define the next decade. It has never been a one-size-fits-all solution, but for those it does suit, the case today looks compelling.