CEO of world's largest asset manager: What investors are missing

BlackRock Chairman and CEO Larry Fink is warning investors about using passive money management strategies, such as exchange-traded funds, to try to achieve more aggressive returns usually associated with active management.

What people are missing is many investors across the board are using passive for active," Fink told.

As the leader of the world's largest asset manager, with more than $5 trillion in client money, Fink said he's a believer in active management, a strategy under pressure because of recent poor returns that have been exacerbated by fees.

"We're a believer in active, ... and we're continuing to invest in our active portfolios," he said." you're looking a migration from active to passive."

"Insurance companies are having a harder time attaining the necessary returns to meet their insurance premium targets," Fink said. "So our clients are looking for solutions."

But aggressive central bank stimulus is causing many asset classes to correlate, which puts investors who normally thrive on looking for diamonds in the rough at a disadvantage, Fink said.

Fink also blamed passive investing for the lack of divergence. With so many investors buying instruments tied to indexes, it makes buying individual stocks not in the indexes tougher, he said.

In mid-July, the billionaire leader of the world's largest asset manager told he thought the U.S. stock market should not be trading at record highs, because the data on fund flows don't support the moves.

Three other closely followed billionaire investors all expressed caution in interviews Monday: David Tepper, Carl Icahn and Jeffrey Cundlach.