Investors dramatically reduced the amount of cash flowing into investment giant BlackRock Inc. (NYDE: BLK) this spring, signaling the dawn of a period riddled with concerns over passive investing over evolving global dynamics and trade issues.

BlackRock said Monday it received $20 billion in net inflows in the second quarter. While the sum is enormous, it was down from more than $100 billion a year ago. BlackRock is the world's largest asset manager and a pioneer of low-cost index-based investing, and even though it received a better-than-expected quarterly profit, its shares fell around 1.8% before rebounding to trade down 0.2%.

A large part of plummeting investor confidence can be attributed to an industrywide slowdown in the demand for BlackRock's most popular product, exchange-traded funds (ETFs) that track markets.

BlackRock's iShares-branded ETFs brought in $17.8 billion during the quarter, a decrease from $34.6 billion in the first quarter. The company also cut fees on some ETFs to increase its market share.

"Broadly, we've seen a weakness in flows this past quarter driven by investor de-risking and less investor risk appetite in the marketplace," said Morgan Stanley analyst Michael Cyprys.

Cyprys said the company's growth is "going to have ups and downs, and this is one of the downs," but added that investors "have an opportunity to buy in on the weakness.

BlackRock's revenue rose more than 10% to $2.9 billion, while net income attributable to the company rose to $1.07 billion in the second quarter, up more than 25%. Though demand for index funds was weaker, it was still positive, helping beef plump up margins as the company settled into a lower tax rate. Operating income, a measure of profits after some expenses including employee pay, rose 16.4 percent to $1.4 billion in the quarter from the same period in 2017.

"The most important thing we've been proving is the strength of our diversified business model," which includes not just funds but also, increasingly, technology services," said Chief Executive Larry Fink in an interview.

Strong earnings growth, particularly in the US, was clouded during the quarter by rising tensions between America and its trading partners. Fink warned that it is unclear "where we're going with trade," adding that "you saw a lot of international investors pull out of the market because they're questioning what does this all mean in regard to trade and globalization."

Investors pulled $22 billion from the company's stock funds and deposited $26 billion into its fixed-income products, according to the earnings release. Overall flows, excluding funds where investors hold cash temporarily, were $14.50 billion, the lowest since the second quarter of 2016.