Scottish Mortgage driven higher by Tesla’s $1trn milestone – but missed out on even more

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Scottish Mortgage Investment Trust PLC (LSE:SMT) shares were on the up on Tuesday after Tesla Inc (NASDAQ:TSLA), its fourth-largest holding, became the fifth US company to notch up a US$1trn market valuation.


The FTSE 100-listed investment trust was one of Elon Musk’s earlier backers but last year sold more than 40% of what was its largest holding, meaning it missed out on the shares continuing to go through the gears to a new high above US$1,000 apiece.


Shares in SMT, which first bought shares in Tesla in 2013 when the stock was priced at below US$40, were up 1.5% to 1,482.25p on Tuesday morning.


During the first half of last year the investment trust ditched more than 40% of its stake in the electric vehicle company, raising GBP1.18bn of liquidity.


Over that period the Tesla share price rose from just under US$90 to more than US$240. Since then, helped by consecutive profitable quarters overseen by Musk, the stock has zoomed over 300% higher.


These share sales were required under the GBP21bn closed-ended fund’s guidelines, SMT said, to ensure that the portfolio has an appropriate level of diversification.


SMT’s former lead fund manager James Anderson said the trust intended to “remain significant shareholders for many years ahead. We remain very optimistic about the future of the company”.


The investment trust’s three largest stakes are currently vaccine star Moderna Inc, sequencing company Illumina (NASDAQ:ILMN) Inc and semiconductor industry supplier ASML Holding NV (NASDAQ:ASML).


Other main themes include innovation in China, with Tencent Holdings Limited (HKG:0700), Meituan and NIO Inc (NYSE:NIO) its fifth, seventh and eighth largest holdings.


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