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There’s ‘Persistent Demand’ for Stocks: BlackRock CEO

BlackRock expects clients to continue pouring cash into stocks as they look for better returns given historically low interest rates, CEO Larry Fink told CNBC's "Closing Bell" on Tuesday.

The money manager had record inflows into equities in the first quarter—most of it coming in the form of cash, Fink said.

"We saw a persistent demand for equities," he said, adding that a major institutional client put another $1 billion into stocks Monday. "Clients will continue to be in equities."

Earlier, BlackRock said that clients sunk $33.7 billion into equity funds in the first quarter, while fixed-income funds had $2.6 billion in outflows. In its earnings release, BlackRock stated that historically low interest rates and an aging population is affecting where investors put their money "as investors seek other sources of yield, including from equities, where we witnessed a record $34 billion in net new flows."

BlackRock's assets under management in the first quarter were a record $3.94 trillion, up 7 percent year-over-year and 4 percent from the end of the year.

(Read More: Still 'Tremendous' Opportunity in Stocks: BlackRock CIO)

But investors aren't rushing into stocks indiscriminately. Instead, FInk said, they are investing in three categories: stocks in the U.S., Mexico and Japan; equities that look like bonds; and bonds that look more like equities.

"That's the flavor and characteristic of what we're seeing," Fink said.

The executive also said he remains optimistic that stocks will end the year higher given strong corporate earnings.

"If someone said we're going to have a 5 percent correction, I'd say look at that as an opportunity to get into the market," he said.

Fink also expects that the Federal Reserve will keep its bond-buying program intact longer than the market anticipates, predicting that tapering will begin late this year or early next.

The key will be bank lending to small businesses, he said. Banks are eager to lend, he added, and if rates stay low, businesses can get capital inexpensively, which can spur hiring.

Fink also said that Mexico is a great story, as a rising Chinese currency and higher wages make the country a more attractive alternative for manufacturers. Mexico also has as much natural gas potential as the U.S., he said.

"It's a fantastic place where you can expect a persistent 4 percent GDP growth," he said.

(Read More: Why Mexico's Become a Hotter Investment Than Brazil)

Japan is also an appealing investment as it tries to reflate its economy, Fink said.

"In the short run, it's producing a more enthusiastic economy, and as a result we are seeing investors—who for 20 years underinvested in Japan—reentering," he said, referring to the Bank of Japan's money-printing.

"I believe we are going to see investors come in now because most of the run in the yen is over," Fink said. "If you're interested in Japanese equities, you should do it on an unhedged basis."

By CNBC's Justin Menza. Follow him on Twitter @JustinMenza

Market Insider with Patti Domm