An unexpectedly hot US jobs report has knocked Scottish Mortgage Investment Trust into its steepest slide of the year, piling pressure on its upcoming annual general meeting where shareholders will vote on a private‑market expansion that could reshape the portfolio.
May’s non‑farm payrolls came in at 172,000 additions, nearly double the 85,000 economists had forecast. Markets responded by pricing in an 80% probability that the Federal Reserve will raise interest rates by December 2026 – a jump from 45% before the data. For a trust that leans heavily into high‑growth unlisted companies and richly valued tech names, rising rates are a direct drag on valuations. Over seven trading days Scottish Mortgage lost close to 7% and now sits more than 13% below its 2026 high of €19.50. On Monday alone the London‑listed shares tumbled 42 pence to 1,438 pence, the biggest single‑day loss in the entire FTSE 100.
The sell‑off has pushed the stock to a discount relative to net asset value. The latest NAV stands at 1,500.90 pence per share, while the shares change hands at around €16.96 (roughly 1,444 pence). That gap reflects market anxiety over the portfolio’s sensitivity to rate expectations, but also creates an entry point for income‑focused investors who value the trust’s unbroken dividend record.
That record runs 43 years and counting. The board has proposed a final dividend of 2.97 pence per share, which would lift the full‑year payout to 4.57 pence – a 4.3% increase over the previous year. The ex‑dividend date is 11 June 2026, with payment due on 10 July, subject to shareholder approval at the AGM on 2 July in Edinburgh. Over the past decade the annual dividend has grown at an average rate of 4.6%. Yet the cover is thin: the total dividend of £49.6 million exceeds the net profit of £25.6 million, equating to earnings per share of just 2.28 pence. As an investment trust, Scottish Mortgage can hold back surpluses from stronger years to maintain the payout even when portfolio earnings are squeezed.
Shareholder approval is also required for a structural change that has become the focal point of this year’s AGM. The trust wants to raise the formal cap on private‑market holdings, which currently stands at 30% of total assets. In practice, private investments already account for more than 40% of the portfolio after a temporary waiver allowed the trust to commit up to £250 million beyond the limit. That waiver, approved by 99.7% of votes in April, underscores the strong support for the private‑market strategy, but the board now seeks a permanent increase to avoid repeated special dispensations. Under the new proposal the cap would be subject to an annual vote at each AGM, beginning in 2027.
Should investors sell immediately? Or is it worth buying Scottish Mortgage Investment?
The private‑market push has accelerated sharply. In the year to 31 March 2026, Scottish Mortgage deployed £254 million into new unlisted companies, nearly double the £132 million of the prior year. Recent additions include the AI firm Anthropic, the social‑media platform RedNote, and the animal‑health researcher Loyal Animal Health. Existing stakes in Enveda, Redwood Materials and Zipline were also topped up. The trust’s total assets now stand at £13.82 billion and the portfolio includes heavyweights such as SpaceX – re‑evaluated to represent 21% of the total – together with ByteDance, Databricks and Stripe.
The private‑market offensive has powered robust performance. For the financial year ended 31 March 2026, the NAV climbed 27.4% and the share price gained 26.8% (including dividends). Over a decade the NAV has compounded at 435.2%, easily outpacing the FTSE All‑World’s 233.9% return. Since the start of the calendar year the stock is still up 22.1%, despite the recent rout, and remains well above the 52‑week low of €11.68 from November 2025.
Alongside the private‑market vote, shareholders will consider a new share‑buyback authority. The repurchase programme would cover up to 14.99% of outstanding shares but would only be activated when the stock trades at a material discount to NAV – a condition currently met, given the discount that has opened up after the jobs‑data shock.
Whether Scottish Mortgage can simultaneously preserve its 43‑year dividend streak and expand into ever‑larger private‑market bets depends on two intertwined factors: the path of US interest rates and the outcome of the 2 July vote. The Fed’s next move will dictate the near‑term sentiment for growth stocks, while the AGM will determine the structural flexibility the trust needs to sustain its long‑run outperformance.
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