BlackRock, the world's largest asset manager, recorded a new all-time high in its assets under management of $10.6 trillion. This comes from the latest quarterly figures announced by the company on Monday.

CEO Larry Fink emphasized that investors are currently creating a "barbell effect" in the bond markets by opting for low-cost Exchange Traded Funds (ETFs) and alternative investments rather than traditional bond funds.

Assets are on the move," said Fink, pointing out that investors who are still sitting on large cash reserves are preparing for a possible interest rate cut in the US and realizing that they have missed out on a major stock rally this year.

Stock investors are already heavily divided between passive index funds and high-priced private equity funds that promise uncorrelated returns. This trend is now also appearing in the bond market, Fink continues.

We previously talked about a barbell effect in stocks. I think we are seeing it now in the bond market as well," he added. "It is a moment when people are reallocating their money from cash, heavily into fixed-income securities, ETFs, and also into alternative income-focused products such as private credit and infrastructure bonds.

According to Fink, BlackRock is well positioned to benefit from this trend due to its massive iShares ETF business and the impending acquisition of Global Infrastructure Partners, which is expected to be completed by the end of September.

The comments from Fink came as the world's largest asset manager reported revenue of $4.81 billion for the quarter ending June 30, an increase of 8 percent compared to the previous year, but slightly below the $4.84 billion expected by analysts surveyed by Bloomberg.

Improved margins helped increase net profit by 9 percent year-over-year to $1.5 billion. The adjusted figure of $1.56 billion exceeded expectations of $1.47 billion.

Managed assets increased by 1.7 percent quarter-over-quarter. However, net inflows of 82 billion USD in the quarter fell short of the expected 112 billion USD. Equity inflows dropped to 6 billion USD, impacted by reallocation from institutional clients. Inflows into fixed-income securities were hindered by the loss of a single institutional client who withdrew 20 billion USD.

Two weeks ago, BlackRock announced the acquisition of Preqin, a data provider for private markets, as the company continues to invest in alternative assets and technology. ETF inflows were boosted by strong interest in its Bitcoin product.

BLK's investments to strengthen its capabilities in private markets will help reduce reliance on low-yield iShares ETFs and enable the company to benefit from strong long-term growth opportunities in the area of private assets," wrote Edward Jones analyst Kyle Sanders.

BlackRock has traditionally traded at a much higher earnings multiple than its traditional asset management peers, but over the past six months, the company's shares have lagged behind the broader financial sector. Since the beginning of the year, they have risen by 1.4 percent, compared to about 12 percent for financial companies in the S&P 500.

Martin Small, Chief Financial Officer, said the company is on track to achieve its long-term goal of 5 percent organic fee growth per year, and expenses are on course to increase in the low single-digit percentage range, excluding acquisitions.

The shares of the asset manager closed 0.6 percent lower on Monday.