Adding to that, I had mixed feelings Scottish mortgage loan (LSE: SMT) to my SIPP in 2023. The FTSE100 mutual fund fueled a boom in US tech stocks such as Amazon AND Tesla under inspirational manager James Anderson, and then achieved huge success when the technology sold out in 2022.

The share price has halved this year, a steeper decline than most funds in the sector. Anderson retired after nearly 40 years with the company, leaving successor Tom Slater with many challenges. However, I like to buy shares of the best companies after they have gone through (hopefully transient) difficulties and decided to grow rapidly.

Last week was a milestone in my life as my total return was 102%, doubling my initial stake. I’m not the only one having fun. The Scottish Mortgage share price has increased by 67% in 12 months and 120% in three years. Over five years, the gain is more modest at 16%, showing just how brutal 2022 has been.

The FTSE 100 plays on American technology

Today, the bull case is driven by one gigantic story. The trust’s largest holding is SpaceX, a private space and satellite company founded by Elon Musk in 2002. SpaceX is a pioneer in reusable rockets, launches satellites and operates the Starlink internet network. It also has dizzying ambitions, including orbital data centers, a eternal base on the Moon, and eventually even a human colony on Mars. It’s not often that investors get all this from FTSE 100 shares.

Earlier this month, SpaceX reportedly filed documents for a long-awaited initial public offering (IPO) targeting a staggering $1.75 trillion valuation, potentially the largest listing in history. Investors are eager to put money into it, but why wait? They can gain exposure today through Scottish Mortgage.

The investment fund acted early. Following its recent increased valuation, SpaceX now holds nearly 20% of total assets under management. The second largest holding A Taiwanese semiconductor company lags far behind and amounts to only 6.6%.

Scottish Mortgage also has exposure to gigantic American names such as ASML Holding, Amazon, Nvidia AND Metaplatformsalong with smaller publicly traded and privately held companies. Thanks to SpaceX, there is now a high risk of concentration. This works to his advantage today. The company’s shares have surged 18.8% in the past month, despite broader geopolitical concerns. An investment worth £15,000 a month ago is now worth around £17,820, meaning a quick profit of £2,820.

SpaceX is stimulating

I usually avoid IPOs. They arouse great excitement, but valuations may fall later. Musk also spins a ridiculous amount of plates, and X and Tesla they both fought. I’m still excited about my decision to purchase Scottish Mortgage and feel a little pleased with my contact with SpaceX. As a reminder, Scottish Mortgage also has a stake in Anthropic, the artificial intelligence disruptor that is constantly making headlines these days.

I think these are worth considering, but anyone buying a Scottish Mortgage needs to accept that there can be a lot of volatility on either side of an IPO. Trust doesn’t come low-cost either. It is currently trading at a premium of 4.1% to its net asset value, despite recent share buybacks aimed at reducing that value. This, I believe, is the price of success. It’s still a high-risk, high-reward game, but there’s room in your portfolio for one or two of them. Provided the balance is elsewhere.