In only a few minutes, Scottish Mortgage will appear in any British investment forum. Not always with warmth. However, it does come up. The trust, which is run by Edinburgh-based Baillie Gifford, has spent the past few years regaining its reputation following a difficult time when its share price fell by more than half from its peak in 2021. Currently trading around 1,442p, there is a cautious feeling that the worst is behind it. That may or may not be true.
The story behind the share price of Scottish Mortgage Investment Trust is fundamentally one of belief, namely the conviction that the corporations that will change the world in the next twenty years are not presently the ones controlling the stock market. For the most of the 2010s, Baillie Gifford’s long-held belief made them appear like geniuses. Then growth stocks lost favor, interest rates increased, and the trust became vulnerable due to the same ideology that had made it renowned. It was a severe descent. Many people who had grown to believe that SMT was almost certain were shaken by it.
You may learn a lot from the 52-week range. With a high of 1,563p and a low of 981p, this fund isn’t for investors who like easy evenings. A swing of almost 60% from low to high in a single year is indicative of something more profound than typical market fluctuations. It illustrates the degree to which emotion surrounding private and unlisted assets, such as SpaceX, Anthropic, and holdings that are not traded on any exchange and hence have a valuation that is based in part on educated guesswork and in part on trust, affects the Scottish Mortgage Investment Trust share price. That’s more of an observation on the nature of this trust than a critique.
It’s difficult to ignore how the story surrounding Scottish Mortgage changes based on the direction of the wind in Silicon Valley. SMT followed, sometimes ahead of, the spike in AI enthusiasm and the recovery of tech valuations in 2024 and 2025. The AI firm behind Claude, Anthropic, is held by the trust, which is a significant fact considering how the industry has captivated investors in the last two years. Some purchasers seem to be using SMT as a handy stand-in for the AI moment in general rather than thoroughly examining the portfolio.
For a UK-listed investment trust, the market capitalization of approximately £16.18 billion is significant. Nobody loads up on Scottish Mortgage for the income, hence the dividend yield of about 0.32% is essentially meaningless to the buyers. They purchase it because they believe Baillie Gifford will be able to identify the next wave of industry-defining businesses before the rest of the market does. That conviction appears to be well-founded at times. At other times, it appears to be costly optimism.
Whether the current price, which is considerably above that 52-week low, represents a true fundamental recovery or just the most recent surge in interest in the kinds of assets SMT owns is still up for debate. It is good that the discount to net asset value has decreased. However, private asset values continue to be a source of controversy; detractors have long said that some unlisted holdings are valued at amounts that would appear different when properly examined by the market.
The one thing that seems to have remained constant over the course of the last three years is that Scottish Mortgage penalizes anxiousness while rewarding patience. Losses were locked in by investors who panicked close to the lows. There has been some sort of rebound for those who held or even added. Nobody can say with any degree of confidence at this time whether 1,442p is the ceiling of a relief rally or the floor of the following leg up. At different times, the trust has a tendency to make both bulls and bears appear ridiculous. One could argue that’s part of what draws viewers in.
