Scottish Mortgage Investment Trust completely exited its Tesla position in April, securing roughly $6.2 billion in realized profit from an initial $470 million stake established in 2013. The fund also trimmed its SpaceX allocation from 15% in late September to 11.1% following the expiration of post-IPO lock-up restrictions from its June public debut. These strategic divestments helped the trust post a 31.5% net asset value total return over six months, significantly beating global equity benchmarks. The portfolio adjustments come amid recent market declines sparked by investor worries over congressional investigations after the U.S. midterms.
Key points
Baillie Gifford used proceeds from its SpaceX share sales to pay off fund borrowings and…: Baillie Gifford used proceeds from its SpaceX share sales to pay off fund borrowings and reduce overall gearing levels.
Fund managers fully exited Tesla due to heightened competition from Chinese automakers an…: Fund managers fully exited Tesla due to heightened competition from Chinese automakers and the view that robotics potential was already priced in.
The asset manager continues to hold high conviction in SpaceX despite recent share price…: The asset manager continues to hold high conviction in SpaceX despite recent share price declines related to potential congressional inquiries.
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A key early investor has sold the last of its Tesla shares and sharply reduced its SpaceX holding, taking profits from two of its most successful long-term bets.
Scottish Mortgage Investment Trust, a London-listed closed-end fund managed by Baillie Gifford, said Friday that SpaceX represented 11.1% of its total assets as of Wednesday, down from 15% at Sept. 30.
The position helped drive Scottish Mortgage's 31.5% net asset value return in the six months to the end of September. In its half-year results statement, Scottish Mortgage also said it sold its remaining Tesla stake in April, ending an investment that dated back to 2013.
SpaceX windfall
Scottish Mortgage first invested in SpaceX in December 2018, when Elon Musk's rocket company had a reported valuation of about $31 billion, and committed roughly $200 million through 2021.
The investment surged in value as SpaceX expanded its launch business and Starlink satellite network. By the time of its blockbuster IPO in June, SpaceX represented roughly a quarter of Scottish Mortgage's portfolio by value.
The investment trust has since sold shares as post-IPO lock-up…
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