One of the largest French pension funds, the Fonds de Reserve pour les Retraites (FRR), has seen its returns slump in the past three months, according to industry reports.

Investments and Pensions Europe (IPE) reports that the FRR saw returns dip by 2.3% in the three months to June 30, leaving the reserve fund worth a total of E27.6 billion.

However strong performance in Q1 meant that for the half year as a whole, the RFF was able to enjoy 1.9% returns for the first half of 2006.

During the first six months of 2006, despite a strong and sudden downward correction in the equity markets as of the month of May, mandates invested in equities progressed overall, outperforming their benchmark indices, the FRR was quoted as saying by IPE.