An asset swap which pays at a series of pre-determined dates (fixings) the relative performance observed between the current underlying price and its level on the previous fixing date. At each payment date, the return of the underlying asset is exchanged and the underlying asset resets. For example, a relative return swap may involve the quarterly payment of an index performance relative to its past performance:

Payoff @ time T_i = (index @ time T_i/ index @ time T_i-3) – 1.0

Every three months, the payoff of the swap is calculated by relating the underlying index performance now to its performance three months ago, and subtracting one from the resulting figure.