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If Elon Musk’s space company SpaceX does an IPO this year, I imagine that there will be plenty of UK investors who want to buy stock. Musk has made long-term Tesla investors a ton of money and there’s a chance he could do the same again.
The thing is – UK investors don’t have to wait for the IPO to invest in SpaceX. Believe it or not, it’s possible to get exposure to the company today through several London Stock Exchange-listed (LSE) vehicles.
A major investor in SpaceX
For a long time now, Scottish investment manager Baillie Gifford has been a major investor in SpaceX. It holds unlisted SpaceX shares in several of its investment trusts.
These investment trusts trade on the LSE just like regular shares. This means that by investing in these trusts, investors can gain exposure to SpaceX now, well before the IPO.
Baillie Gifford’s most well-known investment trust is Scottish Mortgage (LSE: SMT). This is a growth focused product that invests in disruptive companies (both listed and unlisted).
In this trust, SpaceX is the largest holding. At the end of March, it represented 19.3% of the portfolio.
I suspect the holding is a much larger percentage of the portfolio now though (maybe 25-30%). Because I don’t think Scottish Mortgage is valuing the company at the figure of $1.7trn to $2trn that is currently being discussed.
Let’s say for now that it represents 25% of the portfolio. If an investor was to put £10,000 into Scottish Mortgage, roughly £2,500 of that would be going into SpaceX.
The other £7,500 would be going into names such as Amazon, Taiwan Semi, ASML, and Nvidia. Overall, the investor would get access to lots of great growth companies.
It’s worth pointing out that the significant exposure to SpaceX does add risk here. If the space stock tanks, this trust could underperform.
I think it’s worth considering as part of a diversified portfolio though. I hold it in my own portfolio.
Another great option
A second Baillie Gifford investment trust worth highlighting is its US Growth Trust (LSE: USA). This is a smaller growth-focused product centred on US companies (listed and unlisted).
At the end of March, SpaceX was the largest holding at 14.9% of the portfolio (so maybe closer to 20% now). Other top holdings were Stripe (another unlisted company), Amazon, Nvidia, Meta, and Netflix.
This product is perhaps a little riskier than Scottish Mortgage as it’s focused on only one geographic market. Ultimately, it lacks the geographic diversification of the larger product.
I still think it’s worth a look though. After all, the US market has a brilliant track record when it comes to generating wealth for long-term investors.
We can see that in this product’s long-term performance. Since its inception, a little over eight years ago, its share price has more than tripled.
