We're cutting one of our financial stock positions due private credit concerns

We’re selling 30 shares of BlackRock at roughly $1,072 each. Following Monday’s trade, Jim Cramer’s Charitable Trust will own 35 shares of BLK, decreasing its weighting to under 1% from about 1.8%. We’re cutting our BlackRock position nearly in half as the stock rose nearly 1% Monday. During our Monthly Meeting last Friday, we talked about how the asset manager put together a couple of strong quarters in a row, but we leaned toward selling some because it has come under fire recently due to its private market’s exposure. Stocks with private credit exposure came under scrutiny last fall due to the high -profile bankruptcies of First Brands and Tricolor. More recently, worries about AI disrupting enterprise software and other industries have put pressure on this group. It’s something that Jim Cramer discussed at length in his Sunday column. BLK YTD mountain BlackRock YTD To be sure, BlackRock is a strong operator, and the sources of its base fees — predominantly equities and fixed income — make it far more resilient than the rest of the group. That’s why the stock is flat year to date and performing much better than the 6% decline in the broader financials sector. But the stock could become guilty by association as this overhang on private credits persists. Additionally, our BlackRock thesis has been predicated on private markets becoming more mainstream among retail investors and increasingly making their way into 401(k) plans. In light of the recent negative attention surrounding the space, it would not be surprising to see some resistance to that push. From this sale, we will realize a small average gain of about 7% on stock purchased in late 2024 and early 2025. (Jim Cramer’s Charitable Trust is long BLK. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.