Scottish Mortgage Investment Trust, a London-listed closed-end fund managed by Baillie Gifford, announced on Friday that it has sold all of its remaining Tesla shares and significantly reduced its investment in SpaceX. These moves represent a strategic adjustment to the fund's most successful long-term positions, allowing the trust to take profits from two major bets while maintaining a diversified portfolio.
As of Wednesday, SpaceX accounted for 11.1% of the fund's total assets, a decrease from the 15% share it held at the end of September. This reduction follows the gradual lifting of post-IPO lock-up restrictions on the rocket manufacturer's shares. Despite the sale, the trust stated that its conviction in SpaceX remains high, describing the decision as a necessary balance between strong belief in the company's future and disciplined portfolio management.
The SpaceX investment, which began in December 2018 with a reported valuation of approximately $31 billion, has been a major driver of the fund's performance. Scottish Mortgage committed roughly $200 million to the company through 2021. The position surged in value as SpaceX expanded its launch operations and Starlink satellite network, eventually representing about a quarter of the trust's portfolio by value ahead of its June IPO. During the six-month period ending in September, SpaceX added eight percentage points to the fund's returns.
The fund's overall performance has been robust, with a net asset value return of 31.5% in the six months through September 30. This significantly outperformed the FTSE All-World Index, which returned 16% over the same period. Additionally, the trust's share price delivered a return of 33.8%. Proceeds from the recent SpaceX sales have also been used to repay borrowings and reduce the fund's gearing.
The exit from Tesla marks the conclusion of an investment that began in 2013. In July, the fund reported that it had invested around $470 million in the electric vehicle maker and generated approximately $6.2 billion in realized profit over the 13-year holding period. The investment returned 13 times the initial capital, according to the trust.
Scottish Mortgage explained that the decision to sell the remaining Tesla stake came after the share price came to reflect much of the company's promise in autonomy and robotics. The fund also pointed to intensifying competition in Tesla's core automotive business, particularly in the Chinese market, as a factor in its exit strategy.
Market conditions for both companies have been volatile recently. Shares in SpaceX and Tesla fell by approximately 9% and 11% respectively on Thursday. This decline wiped out more than $420 billion in combined market value compared to the previous Tuesday's close. Investors have expressed concern that Elon Musk could face new congressional probes following the U.S. midterms, which might expose his companies to tighter regulation.
Scottish Mortgage is one of several U.K. investment trusts that were early backers of SpaceX. The trust's strategy of investing globally in a mix of public and private high-growth companies with a longer-term view has proven profitable, though the recent sales indicate a shift toward managing risk and taking profits on maturing investments.
The fund's actions come amidst a broader context of activist pressure on U.K. trusts with significant SpaceX exposure. Another Baillie Gifford fund, Edinburgh Worldwide Investment Trust, faced a bitter activist campaign by Boaz Weinstein's hedge fund Saba Capital in 2025, where the SpaceX holding became a key flashpoint in the dispute. Scottish Mortgage's current approach appears to prioritize reducing concentration risk in its largest private equity position while retaining a substantial stake.
