FRANCE - Fonds de Réserve pour les Retraites (FRR), France’s national pension reserve, has seen a reversal of fortunes since posting a -4.2% return in the second quarter to the end of June.

After a strong recovery in 2009 that continued into the first few months of this year, the pension reserve has seen total assets fall to €33.1bn; over 4% lower than at the end of the last quarter.

FRR said in a statement that the second quarter was marked by concerns about sovereign risk as well as questions regarding the strength of economic growth.

Following the negative results, the year-to-date returns slumped to -1.7% leading to overall returns of 2.3% since the fund was first launched in mid-2004.

FRR’s portfolio comprises 47% fixed income and money market investments, with a further 44% in shares, 5% in commodities and the final 3.6% allocated to the property market.

In May, the reserve fund announced record growth of 25%, after increasing its AUM from €26bn in March 2009 to €34.5bn at the end of Q1 2010.