Tumultuous markets and financial problems in Europe are hurting profits in the asset management industry, according to Laurence Fink, chief executive of BlackRock , the world's largest asset manager.

This (volatility) is not a good short-term trend for the asset management business, Fink said, speaking in New York at a Barclays Capital conference on Monday.

Fink said that BlackRock, which oversees more than $3.6 trillion, will seek to maintain its profit margin by being even more disciplined on expenses.

Most large investors continue to shun equities and other relatively risky assets and favor fixed-income securities, Fink said.

The trend may be appropriate in the short term but not over the long term, Fink said.

For long-term investors it makes no sense to have a portfolio of bonds other than being frightened of the world, Fink said. Right now, maybe being frightened of the world is a good position to be in.

Shares of New York-based BlackRock dropped $1.32, or 0.9 percent, to $149.75 in afternoon trading on the New York Stock Exchange. The shares have fallen 19 percent over the past three months, almost double the decline of the Standard & Poor's 500 Index.

(Reporting by Aaron Pressman; Editing by Steve Orlofsky)