What's going on?

BlackRock reported second-quarter revenue and profit that missed analyst forecasts, but the update from the world�s largest investment manager also offered valuable insight into what investors were up to last quarter…

What does this mean?

The amount of money BlackRock looks after grew to more last quarter than the first. And that�s a big deal to investors in BlackRock�s shares, since most of the firm�s revenue comes from the fees it takes as a percentage of that $7 trillion pot.

Looking at which BlackRock funds investors bought into tells you a lot about investors� motives and mindsets: they were, most notably, moving money into �fixed income� funds. These investments � which include government bonds � offer steady payments, and have become increasingly popular recently, mostly at the expense of stock funds.

Why should I care?

For you personally: Hard to pass up lower fees.

The share of investors� cash in �passive� funds is getting bigger. These funds track the performance of stock market indexes (often via exchange-traded funds) unlike �active� funds where a manager makes investment decisions for you. In the US, half of all stock fund investment is now passive. And with good reason: all else equal, the fees you�ll pay on passive investments are lower than on active funds. That�s great news for you but not so great for investment managers. In fact, according to Morgan Stanley, even investors who do want hands-on money management are now less willing to pay for it � so firms like BlackRock are having to find other ways to make hay.

The bigger picture: Alternative investing is the new black.

Blackstone, the world�s largest �alternative� investment manager (think private equity and real estate), reported higher profit growth than expected on Thursday, partly thanks to sales of some of its investments. And Blackstone�s not resting on its laurels, either: it bagged several deals last quarter, which investors hope will prove their worth in the company�s future profits.