Scottish Mortgage Buys Back Shares at a Discount as Dividend, Rate Fears, and Private-Market Vote Converge

Scottish Mortgage Investment Trust is navigating a period of multiple pressures. The £multi-billion fund bought back 800,000 of its own shares on June 8, spending roughly tens of millions of pounds at 1,436.86p each. The repurchase came as the stock slipped to €16.89, a weekly decline of around 7%, and was executed at a notable discount of almost 40p to the portfolio’s net asset value, which stood at 1,475.91p at the time.

The buyback is the first under a newly tightened policy. Management has said it will now only repurchase shares when the market price falls below NAV, ending the previous more active support strategy. The shares acquired on June 8 will be held in treasury, bringing the total to some 366 million own shares and giving the board greater flexibility for future capital actions.

The timing of the transaction coincides with a volatile period for growth stocks. A stronger-than-expected US jobs report has pushed the implied probability of a Federal Reserve rate hike in December 2026 above 80%, triggering a sharp rotation away from the high-growth holdings that dominate Scottish Mortgage’s portfolio. The fund’s shares have fallen from a year-to-date high of €19.50 in late May, though they still show a gain of just over 21% since January.

Should investors sell immediately? Or is it worth buying Scottish Mortgage Investment?

Adding to the near-term focus is the ex-dividend date on Thursday. Shareholders will qualify for a final dividend of 2.97p, lifting the full-year payout to 4.57p. The dividend, however, rests on thin coverage: the total distribution of £49.6 million is nearly double the net profit of £25.6 million.

All eyes are now on the annual general meeting scheduled for July 2 in Edinburgh. The board is seeking approval to raise the cap on unlisted investments from the current 30% of total assets. Private holdings already exceed 40%, driven largely by a revaluation of SpaceX that pushed that single stake to 21% of the portfolio. The AGM will also vote on a new buyback authority allowing the repurchase of up to 14.99% of shares, albeit strictly below NAV.

The push to relax the private-company limit comes amid a broader headwind for private equity. A recent industry report showed technology deal volumes plunging in the first quarter of 2026, with software valuations under pressure. If shareholders back the board’s proposal, the risk profile of the trust will increase further — a calculated bet that the premium for private-market returns outweighs the liquidity discount.

Despite the current turbulence, Scottish Mortgage’s longer-term record remains formidable. Over the past ten years, the net asset value has surged by more than 435%. The outcome of the July 2 vote will determine whether the fund’s managers retain the firepower to pursue further high-conviction unlisted bets, even as market conditions test the value of those holdings.

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