SpaceX has really come to prominence lately. Live feeds of its rockets going into space for NASA have increased interest in the company founded by Elon Musk. No wonder people watching the launches are wondering how to take a position in SpaceX stock.
One of Musk’s other companies, Tesla, has seen a share price boom in 2020. But as SpaceX is a private company not listed on any stock market, it is more difficult to invest in its success. If I wanted to share in SpaceX’s success at this point, there is one share I would buy.
An unlikely sounding tech expert
When one hears the name Scottish Mortgage Investment Trust (LSE: SMT), it sounds far away from the futuristic technology of rocket launches. It was established over a century ago, after all. But the investment trust buys shares in a wide range of assets. Many involve cutting edge growth stories.
In the past few years, the company had had a sharp eye for up-and-coming technology companies. It built a large position in Tesla, whose shares continue to surge. In fact, the trust’s position in the electric carmaker grew so valuable that it sold part of it down this summer. But that is only one of it successful investments in tech giants. Its next three biggest holdings are also all tech giants – Amazon, Alibaba, and Tencent. But the interest that caught my eye lately is the one in SpaceX stock.
Building a rocket programme obviously doesn’t come cheaply. SpaceX has funded itself in part by raising large sums selling shares privately to institutional investors. With its track record spotting promising tech companies early on, it doesn’t surprise me that Scottish Mortgage Investment Trust decided to take a stake in SpaceX. Last year, it invested £54m into the rocket company.
SpaceX stock is just one of the trust’s many tech investments
Scottish Mortgage Investment Trust’s involvement in SpaceX means that it should share in any future financial benefit the company’s growth generates. It is less than 1% of its total holdings, so SpaceX is only one reason I’d consider investing in the trust.
However, buying shares in the trust is attractive to me precisely because of its diversified portfolio. Not only could I use it to get some indirect exposure to SpaceX stock. A single share would let me ride on the trust’s stockpicking skills, as shown in its current portfolio of well-known tech champions. That has already led to the trust’s shares rising sharply in recent years. But I wouldn’t be surprised if there is more growth to come from its fast-moving tech investments.
On top of that, the trust has increased its dividends every year for decades. I don’t know whether that agreeable policy will last, but I do like the focus it shows on rewarding shareholders. Along with its growth story, it means I’d consider riding the SpaceX story by buying shares in Scottish Mortgage Investment Trust.