Scottish Mortgage Final Results

RNS Announcement: Final Results

Scottish Mortgage Investment Trust PLC

Legal Entity Identifier: 213800G37DCS3Q9IJM38

Results for the year to 31 March 2026

Source: LSEG / Baillie Gifford. All figures are total return*. See disclaimer at the end of this announcement.

*   Alternative Performance Measure - see Glossary of terms and Alternative Performance Measures at the end of this announcement.

†   In sterling terms.

The following is the Preliminary Results Announcement for the year to 31 March 2026 which was approved by the Board on 26 May 2026.

Statement from the Chair

Introduction

This year has been characterised by a complex and shifting backdrop for investors. Markets continued to contend with uncertainty around interest rates, inflation, geopolitics and trade policy. More recently, war in the Middle East, sharp moves in oil prices and a significant sell-off in parts of the software market have served as a reminder that the path of progress is seldom straightforward.

At the same time, however, the market has increasingly recognised the scale of opportunity presented by artificial intelligence ('AI'), the infrastructure needed to support it, and the companies capable of using it to reshape their industries. We are therefore witnessing what may prove to be a once-in-a-generation shift in technology, with value being reallocated across the global economy. Periods of such profound change are often accompanied by volatility, but they have historically created significant opportunities for long-term investors.

Against this backdrop, I am pleased to report a strong year for Scottish Mortgage, both in absolute and relative terms. While encouraging, it is important to reiterate that our investment approach is long term in nature, and performance should not be judged over a single year. The companies in which we invest are often at the forefront of technological and structural change, and returns are therefore unlikely to be linear. Our strategy is built on the belief that a relatively small number of exceptional companies can drive a disproportionate share of long-term returns. Identifying and holding these outliers requires patience and a willingness to tolerate volatility, which is an inherent feature of investing in companies at the forefront of change. Scottish Mortgage's ability to access both public and private markets remains a distinctive feature of this approach.

We therefore believe shareholders are best served when their own investment in Scottish Mortgage is similarly long term and aligned with the long-term nature of the Company's investment approach.

Performance

Source: AIC/LSEG/Baillie Gifford.

*   Alternative Performance Measure - see Glossary of terms and Alternative Performance Measures at the end of this announcement.

Over the year to 31 March 2026, the Company's net asset value ('NAV') total return was 27.4% and its share price total return was 26.8%. Over the same period, the FTSE All-World Index returned 18.0%.

A notable contributor to performance was SpaceX, where continued strong operational execution has led to a significant upward revaluation, increasing its position as the Company's largest holding by some margin. This highlights both the importance of access to leading private companies and the extent to which a small number of exceptional investments can drive long‑term returns. A separate briefing note on SpaceX, including subsequent public information following its IPO filing, is available on the Company's website: scottishmortgage.com‡.

While performance over the year is encouraging, it follows a more challenging period for growth investing, which continues to influence the Company's five-year record. Shareholder experience will therefore vary depending on the period considered.

Over the longer term, however, performance remains strong. The ten-year NAV total return of 435.2% compares favourably with 233.9% from the FTSE All-World Index, reflecting the benefits of a patient, long-term approach.

As in previous years, we emphasise that one year is too short a timeframe over which to assess performance. Our focus remains firmly on long-term outcomes, and the Board continues to believe that the portfolio is well positioned to deliver attractive returns over time.

Change in Investment Policy

Following the year end, shareholders approved a targeted change to the Company's investment policy at a General Meeting held on 10 April. This provides the Managers with limited additional flexibility to invest in private companies when the portfolio is above the 30% limit, through an additional capacity of up to £250 million, subject to annual shareholder approval.

This is a modest but important evolution. It ensures that the Company is not forced to forgo attractive new or follow-on investment opportunities in exceptional private businesses, while maintaining robust guardrails and oversight.

Value for Money

We remain determined that shareholders should keep as much as possible of the returns generated by their investment. Low costs are central to the Scottish Mortgage proposition.

The Company's ongoing charges remain very low at approximately 0.33%, and there are no performance fees. This is particularly important given the breadth of access Scottish Mortgage offers. Few vehicles provide shareholders with exposure to both listed and private growth companies in a single, liquid portfolio. Fewer still do so at such a low cost.

Private market exposure is often associated with high fees and limited access. Scottish Mortgage provides access to many exceptional private companies through the investment trust structure, many of which are now large, established businesses rather than early-stage ventures, with daily liquidity in the Company's shares and a fee structure that remains highly competitive.

Financial Position

The Company's financial position remains robust. During the year, a number of refinancing actions were undertaken, maintaining a diversified and flexible debt structure. The overall cost of debt remains low at approximately 3.6%.

Gearing has naturally reduced slightly over the year, moving from around 13% to approximately 11%, reflecting the growth in the portfolio rather than a reduction in absolute borrowings. The Board continues to view gearing as a long-term tool to enhance returns, used judiciously and with appropriate discipline.

Earnings and Dividend

Revenue earnings have returned to broadly similar levels to 2024, as 2025 was impacted by the write-off of accrued interest income on the Northvolt Convertible Note. As has consistently been the case, the portfolio is primarily focused on capital growth rather than income generation, with many of our largest holdings reinvesting cashflows rather than distributing income.

Nevertheless, the Company continues to maintain its long track record of dividend growth and remains an AIC 'Dividend Hero', having increased its dividend for 43 consecutive years. The total dividend for the year will increase by 4.3% to 4.57 pence per share, with a final dividend of 2.97 pence payable on 10 July 2026.

Discount Management

The Board remains focused on managing the Company's share price discount and premium to NAV. Over the year, the discount moved modestly from approximately 9.0% at March 2025 to around 9.5% at March 2026, despite continued buyback activity at scale.

It is worth noting that the discount at the year end was influenced by a sharp increase in the Company's NAV on the final day of the reporting period. Absent this movement, the year-end discount would have been somewhat narrower.

Encouragingly, post year-end, renewed investor interest, has resulted in the Company trading at a modest premium.

In line with the Company's policy, shares have been issued at a premium since the year end. The Board remains committed to continuing buybacks should the shares return to trading at a discount.

ESG

The Board continues to support the Managers' approach to environmental, social and governance considerations, which are integrated into the investment process. We believe that thoughtful engagement with portfolio companies on these issues contributes to long-term value creation.

Shareholder Engagement

Engagement with shareholders remains a priority. Key events during the year included the second Scottish Mortgage Digital Conference and investor forums in Edinburgh and London. The Company has also continued to broaden its engagement internationally, reflecting ongoing efforts to develop the overseas shareholder base.

The 'Invest in Progress' podcast series continues to be an important part of our engagement, providing shareholders with direct insights from the Managers and leaders of portfolio companies. The continued success of the series reflects the value placed on clear and accessible communication.

The Annual General Meeting will be held at 4.30pm on Thursday 2 July 2026 at the National Galleries of Scotland, Princes Street Gardens entrance, Hawthornden Lecture Theatre, The Mound, Edinburgh EH2 2EL, and we encourage shareholders to attend.

Board Composition

I am delighted to welcome Heather Manners to the Board during the year. Heather brings valuable experience across investment management, investment trusts and financial services, which will further strengthen the Board's collective expertise.

As previously announced, Professor Patrick Maxwell will retire from the Board following many years of dedicated service. On behalf of the Board, I would like to thank Patrick for his significant contribution, particularly his insight and perspective in areas such as healthcare and scientific innovation. Sharon Flood will succeed Patrick as Senior Independent Director.

During the year, the Board established a Remuneration Committee, chaired by Sharon Flood. In addition to Directors' fees, the Committee is expected to consider certain aspects of Board effectiveness and development. The Board has also made use of working groups to support oversight of important areas of activity as the needs of the Company develop.

Outlook

Looking ahead, the environment remains uncertain. Geopolitical tensions, evolving economic policy and structural shifts in markets will continue to influence sentiment. In a more fragmented world, supply chains, capital flows and regulatory environments are all in flux, creating both risks and opportunities for global investors.

At the same time, we believe we are in the early stages of a profound technological transition. Artificial intelligence is not simply another incremental innovation; it has the potential to reshape industries, alter competitive dynamics and change where value accrues across the economy. As with previous paradigm shifts, the ultimate winners are unlikely to be obvious in advance and may emerge from different geographies, sectors and stages of development.

In this context, the Board continues to support the Managers' long-term, globally unconstrained approach. This includes maintaining exposure to selected Chinese companies where compelling opportunities exist, notwithstanding a more challenging domestic economic backdrop and heightened competitive dynamics. It also includes continued participation in private companies, where many of the most important innovations are taking place.

Periods of rapid change are rarely comfortable. However, they are often the most rewarding for investors able to remain patient and focused on long-term outcomes. The Board remains confident that Scottish Mortgage's approach, of seeking out exceptional companies and supporting them over extended periods, positions the Company well to capture these opportunities and to continue delivering attractive long-term returns for shareholders.

Christopher Samuel
Chair

26 May 2026

Past performance is not a guide to future performance.

See disclaimer at the end of this announcement.

Manager Review - Tom Slater

It is difficult to recall a twelve-month period in which more of the assumptions underpinning the post-war international order were deliberately dismantled. The pattern was visible from the first day of the new administration: the withdrawal from the WHO and the deconstruction of USAID signalled that America's retreat from the international system was not a negotiating posture but a programme. The tariffs that followed in April, imposing sweeping duties on almost every country the United States trades with, extended that logic into commerce. The longest government shutdown in US history, a military intervention in Venezuela, and the US-Israel strikes on Iran in February 2026, which closed the Strait of Hormuz and disrupted a fifth of global oil trade, confirmed that the pattern was accelerating rather than moderating. These are serious developments, and several of our holdings bore the cost of them directly.

But we think the development that will matter most when this period is viewed in retrospect is not the fracturing of the old order. It is the construction of the new one. Beneath the geopolitical turbulence, a transformation of a fundamentally different kind is underway. The acceleration of artificial intelligence into a global infrastructure buildout is, in our judgment, the most important structural change in the global economy since the emergence of the internet, and we are still in its early stages. The major cloud platforms such as Microsoft, Amazon and Google have more than tripled their collective spending since 2023, with the largest now committing well in excess of $100 billion annually. China's DeepSeek demonstrated that the most advanced AI was not a US monopoly, triggering a competitive response that accelerated spending further. When the tariff regime has been renegotiated and the Strait of Hormuz has reopened, the rewiring of the global economy around artificial intelligence will still be accelerating.

The tension between these two forces, the dismantling of old arrangements and the construction of new capability, defined the portfolio's year. The businesses at the infrastructure layer of the AI transition compounded through the geopolitical turbulence, largely unaffected by it. Those more exposed to cross-border commerce, consumer confidence, or the competitive pressures of a Chinese economy running on weak demand fared very differently. They paid the price for a world that shifted faster than their valuations had assumed. The gap between these two categories of business widened significantly over the year.

SpaceX

SpaceX was by far the largest single contributor to returns this year. At the year end, it represented over 19% of the Company's assets, a degree of concentration which is highly unusual for us. It would be remiss not to acknowledge the potential for volatility that comes with a position of this size.

SpaceX should no longer be thought of as an aerospace contractor but as a dual monopoly: the world's dominant launch provider and a global connectivity utility with the potential for software-like margins. Though the launch vehicles generate the media attention, the valuation has been driven primarily by its satellite communications subsidiary, Starlink, which is building the kind of predictable, highly profitable revenue that the best software businesses aspire to. The difference is that its assets are in orbit and extraordinarily difficult to replicate. The acquisition of xAI brings a further dimension that the market is only beginning to price.

Starlink added over 4.6 million new active customers in 2025, reaching nine million in total and expanding into thirty-five additional countries. The acquisition of EchoStar's wireless spectrum accelerated the push into direct-to-phone connectivity, a development that eliminates the need for dedicated user terminals by allowing standard smartphones to connect directly to Starlink satellites. A Pentagon contract for the Golden Dome missile defence programme underlined the growing dependence of the US government on SpaceX's infrastructure for national security.

In a year when every government in the world was rethinking its communications dependencies, and when the closure of the Strait of Hormuz demonstrated how quickly critical infrastructure can be disrupted, SpaceX's competitive position strengthened rather than weakened.

What makes the future potential of the company so striking is the convergence of SpaceX's capabilities with the defining constraint of the AI era. The demand for electricity to power AI is growing exponentially. The supply, constrained by permitting, grid capacity and the sheer difficulty of building power infrastructure at the pace the technology requires, is not keeping up. Solar panels in orbit are up to ten times more effective than those on the ground, operating outside the atmosphere and unconstrained by the day-night cycle. If Starship achieves the rapid, full reusability it is designed for, and the trajectory of progress suggests it will, the economics of placing compute infrastructure in orbit shift from speculative to compelling. SpaceX is not just building a connectivity business. It is positioning itself at the intersection of launch, energy, and AI in a way that no other company on earth can replicate. That is why it is our largest holding.

SpaceX is a private company, but in April 2026 it filed the documentation with regulators to go public, targeting a mid-June listing on the stock market. As is standard ahead of a public listing, existing holders including the Trust will be subject to a lock-up period during which shares cannot be sold. This listing is the most visible instance of a broader development. The Trust holds several of the world's most valuable private companies, and a number of them, including SpaceX, Anthropic, Databricks, ByteDance and Stripe, are now realistic candidates for public listings in the coming years.

We raise this not to speculate on timing but to point out that the assumption that private holdings are early-stage and speculative does not fit the reality of what we own. These are businesses operating at enormous scale, generating substantial revenues, and in several cases profits that would place them comfortably among the largest listed companies in the world. The closed-end trust structure means we are not forced to sell at the point of listing. We can hold through the transition and beyond. A listing changes the venue in which a company's shares are traded. The opportunity and our reasons for owning it remain the same.

The AI Buildout

When every major cloud platform is spending more on infrastructure than most countries spend on defence, the businesses enabling that buildout operate in an environment that is fundamentally different from the rest of the economy. The growth rate of that spending will eventually moderate as physical constraints in power, land and manufacturing capacity impose themselves. But the absolute level of investment required is unlikely to diminish for years.

The portfolio is positioned at the critical nodes of this buildout. Chipmaker TSMC saw record revenues as high-performance computing rose to 58% of its business and announced $165 billion of cumulative investment across six manufacturing facilities in Arizona. ASML, the sole manufacturer of the lithography machines without which leading-edge chips cannot be produced, sits in an even more deeply protected position: every dollar of the world's AI ambitions flows through its order book. We trimmed ASML through the year as the position grew, recycling some of the capital into NVIDIA, which offered a more attractive valuation relative to its growth trajectory and is continuing to benefit from insatiable demand for the computing power needed to build and run AI systems.

The impact of AI extended well beyond the infrastructure providers. Meta embedded AI into its content recommendation and advertising systems, driving measurable engagement gains at Facebook and Instagram. Amazon is deploying it across logistics, retail and cloud operations. Both positions were trimmed through the year but remain significant holdings. Shopify has embraced AI tooling to allow merchants to do more with fewer people. Its CEO's internal memo requiring teams to demonstrate why AI cannot fulfil a task before requesting headcount captures a cultural shift we are seeing across many of our holdings.

There is an uncomfortable corollary to this. The same AI capabilities that are making businesses like Shopify more productive are compressing the valuations of much of the traditional software industry. When AI agents can write, test and deploy code at a fraction of the cost of a human engineering team, the per-seat pricing models on which many software businesses are built come under fundamental pressure. Software company valuations contracted sharply through the year.

We initiated new positions in AppLovin, whose AI-driven advertising platform is scaling rapidly, and in MongoDB, the database infrastructure business that underpins an increasing share of AI-native application development. Spotify and Roblox both contributed meaningfully, each benefiting from AI-enhanced personalisation in ways that reinforce rather than threaten their competitive positions.

In the private portfolio, we took a new position in Anthropic, which is at the heart of the transition from narrow AI tools to genuinely capable systems, and we regard it as one of the most important AI companies in the world. MiniMax, a Chinese AI foundation model company that we bought at its IPO, is a direct validation that world-class AI capability is being built well beyond the major US technology companies.

The Fracturing of Global Commerce

If the AI buildout represents the world constructing something new, the second defining feature of the year was something old being dismantled. The tariff regime described in the introduction, even after subsequent reductions and a changing legal basis for its imposition, represents a structural challenge to the free trade order on which much of the global economy was built.

Several of our holdings felt this acutely. PDD's international platform Temu, which had been built almost entirely on cheap Chinese cross-border shipping, was among the most directly affected businesses in the portfolio, and we reduced our position. Temu has responded by rapidly expanding local sourcing in its key markets. Adyen, the Dutch payments infrastructure business, saw its share price fall as volumes from the Asian e-commerce platforms most exposed to the tariff regime slowed sharply. We exited Wayfair entirely, concluding that the headwinds facing US consumer discretionary spending had shifted the risk-reward beyond what we were willing to hold. When the trade architecture changes, everything built on top of it must adapt.

Sea Limited faced a different but related challenge. Temu and TikTok Shop were subsidising aggressively to win share in Sea's home markets across Southeast Asia, forcing heavy competitive investment that weighed on profits and the share price. Our additions early in the year were poorly timed.

The luxury industry was caught in the same structural disruption. The growth model that powered the sector for two decades rested on expanding Chinese wealth, aspirational cross-border travel, and frictionless premium goods trade. Hermès underperformed significantly as Asia-Pacific demand fell short of expectations. We added to the position, viewing the weakness as an opportunity to increase exposure to what remains one of the highest-quality businesses in the world.

Ferrari's Capital Markets Day triggered its worst day as a listed company after management chose to prioritise long-term brand protection over the growth trajectory the market had priced in. We regard that as the right decision for the business, even if it was not what short-term investors wanted to hear. In both cases, the underlying business quality is exceptional. What changed was the set of assumptions on which the world had been operating.

We do not view these disruptions as temporary. The imbalances in the global economy, in trade, in debt, in political cohesion, have been building for years. What this administration has done is bring the adjustment forward.

The Cost of Slower Growth

The most difficult area of the portfolio this year was China, and the real issue was not tariffs. It was what happens when well-capitalised companies fight for market share in an economy where domestic consumption is barely growing.

Meituan's decline is the starkest illustration. Its fall was driven not by tariffs or sanctions but by a ferocious price war as Alibaba and JD.com attacked its core food delivery business with aggressive consumer subsidies. The three companies incurred collective costs of over $14 billion in two quarters. Meituan swung from substantial operating profit to a full-year loss. This was a war triggered by the decision of competitors to fight for share in an economy where growth had become scarce, a domestic reckoning with roots in the property correction and a consumer that has become more cautious.

What happened to Meituan is not an isolated case. It is a manifestation of something deeper in the Chinese economy that the Chinese themselves call neijuan, or involution, a competitive dynamic in which everyone runs harder for diminishing returns. The system of local government subsidies, cheap state-bank financing and tax incentives that reward production volume creates world-class companies but simultaneously destroys margins across entire industries.

Solar manufacturers are losing billions despite record shipments. BYD's average selling price per vehicle has fallen steadily even as the technology in each car has improved. Companies that survive this environment emerge with cost structures and engineering capabilities that are extraordinarily difficult to compete with anywhere else in the world, which is precisely why we continue to invest in the best of them. But the process of selection is brutal.

New holding CATL was a conspicuous exception, and one of the year's largest new positions. Its technology and manufacturing lead in electric vehicle batteries proved resilient. The energy transition that underpins demand for its products proceeds regardless of the domestic cycle, and it has built a competitive moat over years of sustained investment. We also took a new position in RedNote, the social media platform that has emerged as China's leading lifestyle and consumer discovery app. Its engagement levels are remarkable and its advertising model is still in its early stages.

ByteDance, our third largest holding, sits in a category of its own. It is perhaps the only non-US company to have achieved dominant consumer reach across cultural and linguistic boundaries at global scale, through TikTok internationally and Douyin domestically. The January 2026 deal that divested TikTok's US operations into a majority-American joint venture resolved the most acute binary risk. Investor focus on TikTok's US regulatory status has consistently undervalued the broader business. Douyin is the leading short-video and e-commerce platform in the world's second largest consumer economy. ByteDance's advertising technology is among the most sophisticated we have seen. The company generates profits at a scale that would place it among the largest technology businesses in the world if it were publicly listed, yet it trades in the private market at a meaningful discount to comparable US platforms. The gap between the quality of the business and the price at which the market is willing to own a Chinese technology asset of this sensitivity is wide. We do not believe the right response to geopolitical complexity is to invest only in places where the outlook feels comfortable.

Beyond AI

AI was the dominant narrative of the year, but it was not the only one. The portfolio's exposure to the other themes we have been following for many years such as the digitalisation of finance, the evolution of transport, and healthcare innovation, continued to progress.

MercadoLibre, one of our largest holdings, delivered another year of strong operational progress as MercadoPago embedded itself as the dominant payments platform across Latin America and the core e-commerce business continued to take share. The company is reinvesting heavily in both commerce and fintech, a phase that compresses near-term margins but is building the infrastructure on which its long-term dominance depends.

What began as disruption is becoming the financial system itself. Stripe is moving well beyond payments into autonomous AI-driven commerce and digital currency infrastructure, two areas that look increasingly like the next layer of financial plumbing. Nu Holdings and Revolut are crossing a different threshold. Nu, to which we added, continued its profitable scaling across Brazil, Mexico and Colombia, and in January received conditional approval from US regulators to establish a national bank. Revolut received its full UK banking licence in March. Both are now regulated banks, not fintechs aspiring to become one.

The evolution of transport, through autonomy, electrification and new physical networks, continued to advance. Drone delivery company Zipline moved from pilot to commercial scale during the year. Its Dallas-Fort Worth rollout, which began with a Walmart launch in Mesquite in April 2025, expanded to roughly twenty sites by the year end, with Chipotle, Panera, Wendy's and more than a dozen other retail and restaurant partners live on the platform. Global deliveries passed two million, and the company announced expansions to Houston and Phoenix. Aurora Innovation launched commercial driverless freight on the Dallas-Houston corridor and surpassed 100,000 autonomous miles without a safety incident. Joby Aviation progressed further through FAA certification. None of these businesses is generating the revenues their eventual opportunity warrants, and the market's patience with long-duration ambition visibly shortened during the year.

In healthcare, Moderna was a positive contributor following a difficult few years. Its next-generation COVID vaccine launched successfully, its combination flu and COVID vaccine moved closer to approval in Europe, and its seasonal flu vaccine progressed toward a US regulatory decision. Positive long-term data from the personalised cancer vaccine programme with Merck reinforced the case that mRNA technology is moving well beyond its pandemic-era applications. Sentiment toward mRNA vaccines, having been deeply unfashionable for two years, recovered materially. Tempus AI continued to apply its genomic data platform to cancer care, and Insulet's automated insulin pump remains one of the most compelling medical device businesses we own. The broader opportunity in mRNA medicines, genomic data and AI-enabled drug discovery is as exciting as it has ever been.

Active Management

SpaceX is a powerful illustration of why this Trust exists. We invested approximately £150 million several years ago in a private company that most funds could not own, held it through periods when private market valuations were deeply unfashionable, and watched it compound into a position worth several billion pounds. That outcome was not available to a passive investor. It was not available to an active manager constrained by the need to stay close to an index, quarterly performance pressure, or a prohibition on private companies. It was available to us because of the specific structural advantages of a closed-end investment trust with a long-term mandate, patient shareholders, a Board that judges the manager over years rather than quarters, and the willingness to look foolish in the interim.

The asymmetry embedded in that kind of outcome is what drives long-term portfolio returns. Academic research has shown consistently that the majority of wealth creation in equity markets comes from a very small number of companies. Most stocks underperform cash over their lifetimes. The entire excess return of the equity market is generated by the outliers. The implication is that if your portfolio does not own the outliers, or sells them too early, you will almost certainly underperform. Our approach is designed around this reality. We concentrate the portfolio in businesses we believe have the potential to be exceptional, we hold them for years rather than quarters, and we accept the volatility that comes with that conviction. Meituan's price war, the compression of software multiples, the repricing of Chinese assets are what it costs to be positioned for asymmetric outcomes. We would rather bear them than own a portfolio designed to avoid them.

The index, by contrast, is designed to do the opposite. It buys more of what has already risen and sells what has fallen. A passive allocation to a global equity index today is a 63% bet on the United States, a 33% bet on the technology sector, and a position in which over 35% of your capital sits in ten companies. That is not a diversified default. It is a concentrated portfolio with a very specific set of assumptions embedded in it.

At the same time, individual stocks have become more volatile, and the volatility is increasingly disconnected from anything happening in the underlying businesses. Fundamental investors now account for less than 15% of US equity trading volume. The rest is driven by participants whose time horizons are measured in days or weeks, and whose borrowed money amplifies every move. When they sell simultaneously, as happened in March, share prices can move 20% or 30% in a matter of days for reasons that have nothing to do with the companies in question. For a fund like Scottish Mortgage, which holds concentrated positions for years and can invest in private as well as public markets, this volatility is the opportunity, not the risk. The gap between what businesses are worth over a decade and what a market dominated by short-term participants prices them at on any given day is where we have always worked. It is widening.

We recognise that this makes the experience of owning Scottish Mortgage less comfortable than it would be if we managed the portfolio closer to a benchmark. The volatility is real and we do not dismiss it. But the alternative, a portfolio constructed to minimise short-term deviation from an index, would mean owning less of what we believe in and more of what we do not, precisely when judgement is becoming more important.

Looking Forward

We own seven of the world's ten most valuable private companies. We own businesses at the epicentre of the AI buildout, in the infrastructure of global commerce, and at the frontier of industries from electric vehicles to satellite communications to autonomous logistics. The opportunity ahead of these businesses is, in most cases, greater than what lies behind them.

The forces that defined this year, the AI buildout, the retreat from multilateralism, the competitive reckoning in China, are interlocking, not independent. Navigating a world shaped by them requires patient ownership of exceptional businesses and the willingness to hold them through periods of discomfort. That is what Scottish Mortgage has always done. The world is changing faster than it has in decades. We would rather be invested in the companies driving that change than sheltering from it.

Tom Slater

Manager Review - Lawrence Burns

Agentic Dawn

In January 2025, the artificial intelligence company Anthropic had an annualised revenue run rate of $1 billion. Fifteen months later, it had surpassed $30 billion. No company in recorded history has grown organic revenue at this scale and pace.

Anthropic, one of Scottish Mortgage's private holdings, has helped usher in the third era of generative artificial intelligence. The first was the conversational era, which began with the launch of OpenAI's ChatGPT in late 2022, when models became reliably capable of following natural-language instructions and holding back-and-forth exchanges with their users.

http://www.rns-pdf.londonstockexchange.com/rns/7788F_1-2026-5-26.pdf

The second was the reasoning era, which began with OpenAI's o1 in September 2024, when models learned to pause, think through problems step by step and produce considered, rather than instinctive, answers. This made them better at solving complex problems, particularly in mathematics, science and coding.

By late November 2025, with the release of Anthropic's Claude Opus 4.5, the agentic era had become unmistakable. Models could now be given a goal and work towards it over many steps: planning, using tools, checking their work and producing useful outputs without constant human prompting. Each era has built on the last rather than replaced it. Today's agents are reasoning models that have learned to act, just as reasoning models were conversational models that had learned to think.

The implications of the rise of agents reach across our portfolio into the structure of the software industry, the value of consumer businesses, the rise of a parallel Chinese AI ecosystem, and the physical supply chain that must be built to meet insatiable computational demands.

Software

The impact of agents has been felt first at scale in software. There the work is digital, the value is high, the goals are often clear, and feedback comes quickly. If an application is not working properly, an agent can be asked to find the problem, write a fix, and test the result before users receive the update.

Adoption has been rapid. Google's chief executive has said that 75% of new code is now written by AI. The founder of one of our portfolio companies recently told us that it is spending more on AI coding tools for its engineers than it is paying them in compensation. Moreover, he claimed the company gets a better return on the tools than on the engineers themselves. At Anthropic itself, AI is now writing between 70 and 90% of all code.

We are heading towards a future in which software is increasingly built, operated and used by agents. This has profound implications. First, it weakens the link between software value and the number of 'seats' - licensed users within an organisation - on which much of the sector's pricing rests. Second, it lowers the barriers to creating software, raising competitive intensity and eroding moats built on accumulated code and complexity. Third, it raises a deeper question about where value will accrue for each company: whether it's to the software applications themselves or to the intelligence layer that understands the task, draws on the relevant data, and directs the work.

The market has reacted quickly. The global software sector has lost roughly $2 trillion in market capitalisation over the past 12 months. Some repricing is likely justified: starting valuations left little room for the questions now being asked about pricing power, competition and value capture. But the repricing has also been indiscriminate. Not all software is equal. In particular, there is a difference between software that is primarily a product for humans to use, and software that provides the infrastructure on which other digital activity depends. The former may be more exposed if agents change how people interact with applications. The latter may benefit as agents generate more demand for the rails beneath them: data queries, security checks, compute workloads, payments and identity.

Our own software holdings are skewed towards this infrastructure layer. Databricks and Snowflake organise the governed company data that agents need if they are to be useful inside enterprises. Cloudflare provides the network and security layer on which agent applications can run, while helping websites identify, control and charge AI agents for access. Adyen and Stripe provide the payment and trust infrastructure that allows agents to transact safely on behalf of customers and merchants. Stripe's founders have been careful not to overstate the speed of change, arguing that agentic commerce is likely to arrive in small chunks rather than one sudden leap; but each chunk of autonomy still requires programmable, permissioned and trusted financial rails.

Far beyond software development

The impact of agents will not remain confined to software development. Most knowledge work, when stripped down to its components, is some combination of reading, writing, reasoning and using software as a tool to get things done. These are precisely the capabilities at which agents are now becoming proficient. Work that has long looked specialised: drafting a legal memo; synthesising a clinical trial; building a financial model; reviewing a patent application, is specialised at the level of expertise but generic at the level of cognitive operation. The consequence is that agents are not a tool for one industry but many.

The same logic applies to consumer businesses. Agents will likely become our shopping, financial and everyday assistants. This creates risk if horizontal AI assistants sit between customers and platforms. But the strongest platforms control assets an agent needs: trust, customer history, payments, credit, logistics, product catalogues and merchant networks. Amazon, MercadoLibre and Sea Limited are thus looking to build their own vertical agents to serve their platforms and enable shopping beyond them as well.

Nubank offers a similar possibility in finance. Long before agents were in vogue, its founder, David Vélez, told us that Nubank's ambition was to give every customer a private banker in their pocket. Agents could make that ambition more practical: helping users manage bills, understand spending, choose when to borrow, build savings and find the cheapest rates on the market. Agents improve price transparency, tailor options to personal circumstances and reduce the friction to taking action. For Vélez, this is an opportunity. As a low-cost operator, Nubank is well placed to seize it.

Few companies will be left untouched by these developments. For some, agents will create new demand; for others, they will threaten existing profit pools; for many, they will do both at once. This will be a key challenge of growth investing in the years ahead. Scottish Mortgage is well placed to meet it because we invest across both public and private markets. Many of the companies shaping the AI frontier remain private, and our access to them gives us a broader view of how quickly the technology is improving, how it is being adopted, and where value may ultimately accrue.

Beyond the Valley

Meeting that challenge also requires geographic perspective. It is tempting to read the AI story as a Silicon Valley one. On questions of frontier model capability, that reading is broadly right. But it is incomplete. China is not merely a follower in artificial intelligence. It is developing different strengths under different conditions.

The first is physical AI. Simulation will be vital, but embodied intelligence improves fastest when virtual training is connected to real-world deployment. China's manufacturing base matters because it provides the world's largest deployment surface. This is reinforced by the largest installed stock of industrial robots, dense local supply chains, supportive policy, and an electric vehicle industry already combining software, hardware and cost-focused manufacturing. Horizon Robotics, one of our holdings, sits directly in this intersection between AI and the physical world, enabling autonomous cars with the ambition to extend this into broader robotics.

The second is cost-performance. Restricted access to the most advanced chips has pushed Chinese model companies to do more with less. This matters because the agentic era will be far more compute-intensive than the conversational era. If agents are to be widely adopted, the cost of useful intelligence must fall dramatically. MiniMax, one of our holdings, develops open-source models that approach frontier capability at a fraction of the training cost, part of a wider Chinese ecosystem pushing intelligence down the cost curve. Low-cost models do not need to win every benchmark to matter. They can win by making intelligence cheap enough to embed into software agents, consumer apps, enterprise workflows, robots and cars.

Our holding in ByteDance points to a third Chinese strength: productisation. The ByteDance AI bot Doubao shows how quickly generative AI can become a mass consumer habit when attached to a company that understands recommendation, interface design and viral distribution. It leads the Chinese market with more than 226 million monthly active users. The next phase of AI will not be shaped only by those with the largest models. It will also be shaped by those that can make intelligence cheap, useful, physical and habitual.

Physical supply chain

These changes all come with immediate implications for the physical supply chain. Each successive era of generative artificial intelligence has added a new layer of compute demand without removing the last. Model training was the original enabler of the conversational era and continues to scale as frontier labs build ever-larger models. The reasoning era added a second layer. Models no longer simply produced an answer; they spent more computing power working through problems, checking their logic and considering alternatives before responding.

The agentic era has added a third layer of compute demand and it's the fastest-growing. Anthropic's data shows that a single agent consumes four times the computational work of a chat conversation, and a multi-agent system around 15 times. The bigger change, however, is that until now, demand for AI was implicitly capped by human attention. A person could only ask so many questions in a day, and each answer had to wait for the next prompt. Agents have effectively removed that cap. Given a goal, an agent loops through the reasoning process dozens of times, runs autonomously even while humans sleep, and increasingly works with other agents in coordination on the same task.

The three eras present compounding S-curves of compute demand, with none yet plateauing and each steeper than the last. The consequence is a sharp and continuing rise in demand for chips. It is this logic that underpins our holdings across the chip supply chain in TSMC and ASML, which are among our largest positions, and NVIDIA, to which we have been adding.

Investing in the supply chain is, in effect, a bet on the growth of AI itself, rather than a bet on which company will capture it. Whichever applications succeed and whichever frontier models prevail, the underlying compute demand runs through the same handful of companies. This is what makes investing in the supply chain such an unusually attractive way to own the growth of AI.

The pattern of revolutions

We are well aware that the history of revolutionary technology is also a history of market overshoot. Human and market psychology have a reliable capacity to misprice the path of even the most transformational innovation. The railway companies of the nineteenth century reshaped the modern economy. At their 1880s peak, they comprised roughly 60% of the entire US stock market, before a series of busts wiped out a great deal of capital. The canal buildout of the late eighteenth century and the fibre-optic buildout of the late 1990s followed a similar pattern: real technological progress, real economic impact, and real financial excess. We should expect the AI buildout to echo that history.

Yet the rational response is not to stand aside from a technological revolution. That is not the safe position it may appear to be. If AI disrupts most industries, then avoiding it doesn't remove risk, it merely shifts it. You might still own businesses exposed to disruption, and not own the businesses in line for generational upside.

The harder task is to remain invested without becoming indiscriminate: to distinguish between durable value and temporary exuberance, between enabling infrastructure and fragile applications, and between companies that merely invoke AI and those that can turn it into enduring economic advantage.

The emergence of capable agents has made us more convinced that AI demand can keep expanding. But history argues for humility. There will be waste, disappointment and overbuilding along the way. Our job is not to believe every claim made for AI, but to own the exceptional companies that can benefit as intelligence becomes cheaper, more capable and more widely deployed.

Lawrence Burns

Portfolio executive summary, 30 largest holdings and list of investments at 31 March 2026 can be accessed here. http://www.rns-pdf.londonstockexchange.com/rns/7788F_2-2026-5-26.pdf

Income statement

For the year ended 31 March

The total column of this statement is the profit and loss account of the Company. The supplementary revenue and capital return columns are prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in this statement derive from continuing operations.

A Statement of Comprehensive Income is not required as all gains and losses of the Company have been reflected in the above statement.

Balance sheet

As at 31 March

The Financial Statements of Scottish Mortgage Investment Trust PLC (Company registration No. SC007058), on pages 83 to 110 of the Annual Report and Financial Statements, were approved and authorised for issue by the Board, and were signed on its behalf on 26 May 2026.

Christopher Samuel
Chair

* See Glossary of terms and Alternative Performance Measures at the end of this announcement.

Statement of changes in equity

For the year ended 31 March 2026

For the year ended 31 March 2025

*   The revenue reserve and the capital reserve (to the extent it constitutes realised profits) are distributable.

Cash flow statement

For the year ended 31 March

*   Cash at bank and in hand represent cash at bank and short term money market deposits repayable on demand.

Notes to the financial statements

1.       The Financial Statements for the year to 31 March 2026 have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and on the basis of the accounting policies set out in the Annual Report and Financial Statements, which are unchanged from the prior year and have been applied consistently.

2.       Income

*   Overseas dividend income represents income from equity holdings. There was no income from preference share (non‑equity) holdings during the year (2025 - nil).

3.       Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed as the Company's Alternative Investment Fund Manager ('AIFM') and Company Secretaries. Baillie Gifford & Co Limited has delegated portfolio management services to Baillie Gifford & Co. Dealing activity and transaction reporting has been further sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited.

          The Investment Management Agreement sets out the matters over which the Managers have authority in accordance with the policies and directions of, and subject to restrictions imposed by, the Board. The Investment Management Agreement is terminable on not less than six months' notice. The annual management fee for the year to 31 March 2026 was 0.30% on the first £4 billion of total assets less current liabilities (excluding short term borrowings for investment purposes) and 0.25% on the remaining assets.

4.       Net return per ordinary share

Revenue return per ordinary share is based on the net revenue after taxation of £25,639,000 (2025 - £17,876,000), and on 1,126,604,877 (2025 - 1,287,655,573) ordinary shares, being the weighted average number of ordinary shares (excluding treasury shares) during the year.

Capital return per ordinary share is based on the net capital return for the financial year of £3,075,980,000 (2025 - net capital return of £1,199,883,000), and on 1,126,604,877 (2025 - 1,287,655,573) ordinary shares, being the weighted average number of ordinary shares (excluding treasury shares) during the year.

There are no dilutive or potentially dilutive shares in issue.

5.       Ordinary dividends

Also set out below are the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £25,639,000 (2025 - £17,876,000).

If approved, the recommended final dividend on the ordinary shares will be paid on 10 July 2026 to shareholders on the register at the close of business on 12 June 2026. The ex-dividend date is 11 June 2026. The Company's Registrars offer a Dividend Reinvestment Plan and the final date for elections for this dividend is 19 June 2026.

6.       Fair value hierarchy

†   The investments in preference shares are not classified as equity holdings as they include liquidation preference rights that determine the repayment (or multiple thereof) of the original investment in the event of a liquidation event such as a take-over.

The fair value of listed investments is bid value or, in the case of holdings on certain recognised overseas exchanges, last traded price. Listed investments are categorised as Level 1 if they are valued using unadjusted quoted prices for identical instruments in an active market and as Level 2 if they do not meet all these criteria but are, nonetheless, valued using market data.

Investments in securities are financial assets designated at fair value through profit or loss on initial recognition. In accordance with Financial Reporting Standard 102, the preceding tables provide an analysis of these investments based on the fair value hierarchy described below, which reflects the reliability and significance of the information used to measure their fair value.

The fair value hierarchy used to analyse the fair values of financial assets is described below. The levels are determined by the lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows:

Level 1 - using unadjusted quoted prices for identical instruments in an active market;

Level 2 -     using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data); and

Level 3 - using inputs that are unobservable (for which market data is unavailable).

The valuation techniques used by the Company are explained in the accounting policies on page 88 of the Annual Report and Financial Statements. A sensitivity analysis by valuation technique of the unlisted securities is on page 105 of the Annual Report and Financial Statements.

During the year, Heartflow (book cost - £39,214,000) transferred from Level 3 to Level 1 on becoming listed (2025 - Bolt Projects Holdings, Tempus AI Inc and Horizon; book cost - £51,643,000, £159,627,000 and £37,062,000 respectively).

Private company investments

Private company investments are valued at fair value by the Directors following a detailed review and appropriate challenge of the valuations proposed by the Managers. The valuation process is overseen by the Private Companies Valuations Group at Baillie Gifford which is independent from the portfolio managers and which takes advice from an independent third party (S&P Global). The Managers' private company investment policy applies techniques consistent with the International Private Equity and Venture Capital Valuation Guidelines 2025 ('IPEV'). The techniques applied are predominantly market-based approaches. The market-based approaches available under IPEV are set out below and are followed by an explanation of how they are applied to the Company's private company portfolio:

●        Multiples;

●        Industry Valuation Benchmarks; and

●        Available Market Prices.

The nature of the private company portfolio currently will influence the valuation technique applied. The valuation approach recognises that, as stated in the IPEV Guidelines, the price of a recent investment, if resulting from an orderly transaction, generally represents fair value as at the transaction date and may be an appropriate starting point for estimating fair value at subsequent measurement dates. However, consideration is given to the facts and circumstances as at the subsequent measurement date, including changes in the market or performance of the investee company. Milestone analysis is used where appropriate to incorporate the operational progress of the investee company into the valuation. Additionally, the background to the transaction must be considered. As a result, various multiples-based techniques are employed to assess the valuations particularly in those companies with established revenues. Discounted cashflows are used where appropriate. An absence of relevant industry peers may preclude the application of the Industry Valuation benchmarks technique and an absence of observable prices may preclude the Available Market Prices approach. Valuations are typically cross-checked for reasonableness by employing relevant alternative techniques.

The private company investments are valued according to a three monthly cycle of measurement dates. The fair value of the private company investments will be reviewed before the next scheduled three monthly measurement date on the following occasions:

●        at the year end and half year end of the Company; and

●        where there is an indication of a change in fair value as defined in the IPEV guidelines (commonly referred to as 'trigger' events).

7.       Creditors - amounts falling due within one year

*   Expires on 8 April 2026 and included in creditors falling due within one year at 31 March 2026.

†   Expires on 30 June 2026 and included in creditors falling due within one year at 31 March 2026.

Included in other creditors is £10,111,000 (2025 - £9,066,000) in respect of the investment management fee.

Borrowing facilities at 31 March 2026

A 2 year US$100 million revolving loan facility has been arranged with National Australia Bank Limited (expiring 16 December 2026).

A 3 year US$170 million revolving loan facility has been arranged with The Royal Bank of Scotland International Limited (expiring 8 January 2027).

A 5 year US$25 million revolving loan facility has been arranged with The Royal Bank of Scotland International Limited (expiring 27 August 2026 but refinanced on 8 April 2026 - see note below).

A 1 year US$120 million revolving loan facility has been arranged with Industrial and Commercial Bank of China Limited (expiring 17 March 2027).

A 1 year US$75 million revolving credit facility has been arranged with The Bank of New York Mellon ('BNYM') (expiring 26 March 2027).

A 3 year US$150 million revolving credit facility has been arranged with Banco Bilbao Vizcaya Argentaria ('BBVA') (expiring 27 March 2029).

The revolving loan facilities are classified as due within one year because of the revolving nature of the facilities and the short drawdown periods. The facilities are available until their termination dates which are noted above. The maturity table on page 104 of the Annual Report and Financial Statements reflects the termination dates of the revolving facilities.

At 31 March 2026 drawings were as follows:

At 31 March 2025 drawings were as follows:

During the year, the undrawn US$75 million revolving credit facility with Industrial and Commercial Bank of China ("ICBC") was refinanced by a new US$120 million revolving credit facility with ICBC. The US$300 million Scotiabank 3 year fixed rate loan expired and was refinanced by drawdowns of US$120 million from the new ICBC facility, US$30 million from a new US$75 million revolving credit facility with The Bank of New York Mellon and US$150 million from a new US$150 million revolving credit facility with Banco Bilbao Vizcaya Argentaria S.A.

Following the year end, on 8 April 2026, the undrawn US$25 million revolving loan facility with The Royal Bank of Scotland International Limited ("RBSI") and the expiring US$180 million fixed rate loan with RBSI were refinanced through a new US$205 million 1 year revolving credit facility, of which US$180 million was drawn down.

The main covenants which are tested monthly are:

(i)       Total borrowings shall not exceed 35% of the Company's adjusted net asset value.

(ii)      Total borrowings shall not exceed 35% of the Company's adjusted total assets.

(iii)     The Company's minimum net asset value shall be £2,500 million.

(iv)     The Company shall not change the investment manager without prior written consent of the lenders.

8.       Creditors - amounts falling due after more than one year

Unsecured loan notes

The unsecured loan notes are stated at the cumulative amount of net proceeds after issue. The cumulative effect is to reduce the carrying amount of borrowing by £1,005,000 (2025 - £1,047,000).

Long term bank loans

There were no bank loans falling due after more than one year at 31 March 2026. The long-term bank loan at 31 March 2025 was stated at the cumulative amount of net proceeds after issue, which reduced the carrying amount of borrowing by £11,000 at 31 March 2025. The main covenants are detailed in note 7.

Borrowing limits

Under the terms of the Articles of Association and the Debenture Trust Deeds, total borrowings should not exceed a sum equal to one half of the adjusted total of capital and reserves at the Company's year end.

Debenture stocks

The debenture stocks are stated at the cumulative amount of net proceeds after issue, plus accrued finance costs attributable to the stepped interest debentures. The cumulative effect is to increase the carrying amount of borrowings by £139,000 (2025 - £653,000) over nominal value. The debenture stocks are secured by a floating charge over the assets of the Company.

9.       The fair value of borrowings at 31 March 2026 was £1,241,583,000 (2025 - £1,250,992,000). Net asset value per share (after deducting borrowings at fair value) was 1,315.8p (2025 - 1,037.0p).

10.     Called up share capital

The Company's authority permits it to hold shares bought back 'in treasury'. Such treasury shares may be subsequently either sold for cash (at, or at a premium to, net asset value per ordinary share) or cancelled. In the year to 31 March 2026, 122,884,921 shares with a nominal value of £6,144,000 were bought back at a total cost of £1,311,758,000 and held in treasury (2025 - 184,816,766 shares with a nominal value of £9,241,000 were bought back at a total cost of £1,709,766,000 and held in treasury). At 31 March 2026 the Company had authority to buy back 50,979,213 ordinary shares.

Under the provisions of the Company's Articles, the share buy-backs are funded from the capital reserve.

In the year to 31 March 2026, the Company sold no treasury ordinary shares (31 March 2025 - no treasury ordinary shares). At 31 March 2026 the Company had authority to issue or sell from treasury 117,640,660 ordinary shares (406,614,074 shares were held in treasury at 31 March 2026).

11.     Transaction costs on purchases amounted to £764,000 (2025 - £1,487,000) and transaction costs on sales amounted to £579,000 (2025 - £1,459,000).

12.     The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2026 or 2025 but is derived from those accounts. Statutory accounts for 2025 have been delivered to the Registrar of Companies, and those for 2026 will be delivered in due course. The auditor has reported on those accounts; the reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

13.     Related Party Transactions

No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter requiring disclosure under section 412 of the Companies Act 2006.

The management fee payable for the year end and details of the management fee arrangements are included in note 3 above.

14.     Subsequent events

Subsequent to the year end, at a General Meeting held on 10 April 2026, shareholders approved a targeted change to the Company's Investment Policy. The change provides limited additional flexibility for private company investments, subject to defined limits and annual shareholder approval.

Space Exploration Technologies Corp. also publicly filed a registration statement (Form S-1) with the U.S. Securities and Exchange Commission in connection with a proposed initial public offering. The filing provides updated information on the company's business and financial position.

Both events are non-adjusting post balance sheet events and have no impact on the financial statements for the year ended 31 March 2026.

The Annual Report and Financial Statements will be available on the Managers' website scottishmortgage.com‡ on or around 27 May 2026.

Glossary of terms and Alternative Performance Measures ('APM')

An Alternative Performance Measure ('APM') is a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework. The APMs noted below are commonly used measures within the investment trust industry and serve to improve comparability between investment trusts.

Total assets

This is the Company's definition of adjusted total assets, being the total value of all assets held less all liabilities (other than liabilities in the form of borrowings).

Net asset value ('NAV')

Also described as shareholders' funds. Net asset value ('NAV') is the value of total assets less liabilities (including borrowings). Net asset value can be calculated on the basis of borrowings stated at book value, fair value and par value. An explanation of each basis is provided below. The NAV per share is calculated by dividing this amount by the number of ordinary shares in issue (excluding treasury shares).

Net asset value (borrowings at book)/shareholders' funds

Borrowings are valued at adjusted net issue proceeds. The value of the borrowings at book is set out on page 110 of the Annual Report and Financial Statements.

Net asset value (borrowings at fair value) (APM)

Borrowings are valued at an estimate of their market worth. The value of the borrowings at fair is set out on page 110 of the Annual Report and Financial Statements and a reconciliation to Net asset value with borrowings at book value is provided below.

Net asset value (borrowings at par) (APM)

Borrowings are valued at their nominal par value. The value of the borrowings at par is set out on page 110 of the Annual Report and Financial Statements and a reconciliation to Net asset value with borrowings at book value is provided below.

Net Liquid Assets

Net liquid assets comprise current assets less current liabilities, excluding borrowings and provisions for deferred liabilities.

Discount/premium (APM)

As stockmarkets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the NAV per share and is usually expressed as a percentage of the NAV per share. If the share price is higher than the NAV per share, it is said to be trading at a premium.

Ongoing charges ratio (APM)

The total expenses (excluding borrowing costs) incurred by the Company as a percentage of the average net asset value (with debt at fair value). The ongoing charges have been calculated on the basis prescribed by the Association of Investment Companies.

A reconciliation from the expenses detailed in the Income Statement above is provided below.

*   Ongoing charges for 2025 have been calculated excluding the impairment provision for the interest previously accrued relating to the Northvolt Convertible Note of £8.8m, following Northvolt's filing for bankruptcy in that year.

Gearing (APM)

At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets grow proportionately more because the debt remains the same. But if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets.

Gearing represents borrowings at book value less cash at bank and in hand and broker's balances expressed as a percentage of shareholders' funds.

Gross gearing is the Company's borrowings expressed as a percentage of shareholders' funds.

Leverage (APM)

For the purposes of the UK Alternative Investment Fund Managers (AIFM) Regulations, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other.

Turnover

Annual turnover is calculated on a rolling 12 month basis. The lower of purchases and sales for the 12 months is divided by the average assets, with average assets being calculated on assets as at each month's end.

Active share (APM)

Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index.

Total return (APM)

The total return is the return to shareholders after reinvesting the net dividend on the date that the share price goes ex-dividend.

*   The dividend adjustment factor is calculated on the assumption that the dividends of 4.38p (2025 - 4.24p) paid by the Company during the year were reinvested into shares of the Company at the cum income NAV per share/share price, as appropriate, at the ex-dividend date.

Compound annual return (APM)

The compound annual return converts the return over a period of longer than one year to a constant annual rate of return applied to the compound value at the start of each year.

Private (unlisted) company

An unlisted or private company means a company whose shares are not available to the general public for trading and are not listed on a stock exchange, including all Level 3 investments as per the fair value hierarchy in Note 6 above.

Third party data provider disclaimer

No third party data provider ('Provider') makes any warranty, express or implied, as to the accuracy, completeness or timeliness of the data contained herewith nor as to the results to be obtained by recipients of the data. No Provider shall in any way be liable to any recipient of the data for any inaccuracies, errors or omissions in the index data included in this document, regardless of cause, or for any damages (whether direct or indirect) resulting therefrom.

No Provider has any obligation to update, modify or amend the data or to otherwise notify a recipient thereof in the event that any matter stated herein changes or subsequently becomes inaccurate.

Without limiting the foregoing, no Provider shall have any liability whatsoever to you, whether in contract (including under an indemnity), in tort (including negligence), under a warranty, under statute or otherwise, in respect of any loss or damage suffered by you as a result of or in connection with any opinions, recommendations, forecasts, judgements, or any other conclusions, or any course of action determined, by you or any third party, whether or not based on the content, information or materials contained herein.

FTSE Index data

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Sustainable Finance Disclosure Regulation ('SFDR')

The EU Sustainable Finance Disclosure Regulation ('SFDR') does not have a direct impact in the UK due to Brexit, however, it applies to third-country products marketed in the EU. As Scottish Mortgage Investment Trust is marketed in the EU by the AIFM, Baillie Gifford & Co Limited, via the National Private Placement Regime ('NPPR') the following disclosures have been provided to comply with the high-level requirements of SFDR.

The AIFM has adopted Baillie Gifford & Co's stewardship principles and guidelines as its policy on integration of sustainability risks in investment decisions.

Baillie Gifford & Co believes that a company cannot be financially sustainable in the long run if its approach to business is fundamentally out of line with changing societal expectations. It defines 'sustainability' as a deliberately broad concept which encapsulates a company's purpose, values, business model, culture, and operating practices.

Baillie Gifford & Co's approach to investment is based on identifying and holding high quality growth businesses that enjoy sustainable competitive advantages in their marketplace. To do this it looks beyond current financial performance, undertaking proprietary research to build up an in-depth knowledge of an individual company and a view on its long-term prospects. This includes the consideration of sustainability factors (environmental, social and/or governance matters) which it believes will positively or negatively influence the financial returns of an investment. The likely impact on the return of the portfolio from a potential or actual material decline in the value of investment due to the occurrence of an environmental, social or governance event or condition will vary and will depend on several factors including but not limited to the type, extent, complexity and duration of an event or condition, prevailing market conditions and existence of any mitigating factors.

Whilst consideration is given to sustainability matters, there are no restrictions on the investment universe of the Company, unless otherwise stated within its Investment Objective & Policy. Baillie Gifford & Co can invest in any companies it believes could create beneficial long-term returns for investors. However, this might result in investments being made in companies that ultimately cause a negative outcome for the environment or society.

More detail on the Investment Managers' approach to sustainability can be found in the ESG Principles and Guidelines document, available publicly on the Baillie Gifford website: bailliegifford.com‡.

The underlying investments do not take into account the EU criteria for environmentally sustainable economic activities established under the EU Taxonomy Regulation.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

Scottish Mortgage is a low cost investment trust that aims to maximise total return over the long term from a high conviction and actively managed portfolio. It invests globally, looking for strong businesses with above-average returns.

You can find up to date performance information about Scottish Mortgage on the Scottish Mortgage page of the Managers' website at scottishmortgage.com‡.

Scottish Mortgage is managed by Baillie Gifford, the Edinburgh-based investment management firm and one of the largest investment trust managers in the UK. Baillie Gifford manages closed-ended and open-ended investment companies, together with investment portfolios on behalf of pension funds, charities and other institutional clients in the UK and overseas.

Investment Trusts are UK public limited companies and are not authorised or regulated by the Financial Conduct Authority.

‡   Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

Past performance is not a guide to future performance. The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares.

26 May 2026

For further information please contact:

Baillie Gifford & Co Limited (Company Secretary)
Email: [email protected]
Telephone: 0800 917 2113

Jonathan Atkins, Four Communications
Telephone: 020 3920 0555 or 07872 495396