Shares of Scottish Mortgage Investment Trust (LSE:SMT) have had a very strong end to the year. As I type, they’ve shot up more than 10% since the start of December, putting them on course for a solid 20%+ return for 2025.
The FTSE 100 trust was already one of my top pension holdings at the start of the year, and it’s even bigger now. So should I sell my Scottish Mortgage shares in 2026? Let’s discuss.
Unconventional
Scottish Mortgage aims to invest in the most transformative growth companies worldwide, whether private or public. But unlike other growth-focused funds, it only has Amazon, Nvidia and Meta Platforms from the Mag 7 in its top 10 holdings.
The top three positions belong to SpaceX, MercadoLibre and Taiwan Semiconductor (TSMC). None of these are in the S&P 500, which shows that Scottish Mortgage is truly differentiated from the average tech fund.
Also, it has owned Amazon shares for 20 years, Nvidia since 2016, and SpaceX since 2018. This ultra-long-term philosophy makes it perfect for my personal pension account.
Volatility is a given with this stock though. It can fall 15%+ in the blink of an eye, especially if US tech stocks sell off (a key risk).
Moreover, some of the picks can look bizarre. For example, when former manager James Anderson first bought Amazon shares, some shareholders blasted this as “insane“. The trust also took a lot of flack for investing early in Tesla.
Amazon and Tesla look less bizarre today. But it’s currently invested in an electric flying taxi firm (Joby Aviation) and quantum computing start-up (PsiQuantum). Unconventionality is a given.
Still, over the past 10 years, Scottish Mortgage has outperformed the FTSE All-World Index. And I’m confident it will do so again over the next decade as technological innovation accelerates.
How does 2026 look?
Looking ahead to 2026, I’m anticipating some key developments inside Scottish Mortgage’s portfolio. The most high-profile will likely be SpaceX’s planned blockbuster IPO. Elon Musk’s rocket firm could attract a mammoth $800bn-$1.5trn valuation.
Last week, this IPO news triggered a significant adjustment in the trust’s valuation of SpaceX. It said total assets made up by SpaceX stood at 15.3% on 15 December, compared with 8.2% on 30 November.
Data analytics firm Databricks could also go public, along with holdings Revolut and Stripe. I think all three of these would command hefty valuations, unlocking further value for Scottish Mortgage shareholders.
On the listed side, Nvidia will release its next-generation AI superchip platform (Vera Rubin), while Joby Aviation is due to launch its air taxis in Dubai. They can ferry passengers from Dubai International Airport to Palm Jumeirah in about 12 minutes rather than 45 minutes by car.
Satellite internet service Amazon Leo (formerly Project Kuiper) is also due to start going live during 2026. It aims to compete with SpaceX’s Starlink.
Finally, TSMC’s 2nm node is set for mass production in the second half (it will power next-gen AI accelerators). This “will further extend TSMC technology leadership well into the future“, according to the chipmaker.
Given all this, and the fact the trust’s still trading at a 9.5% discount to its underlying assets, I have no intention to sell. Instead, I actually think long-term investors should consider buying it today.
