The return that an asset achieves over the course of a specific period, in relative terms, i.e., measured it against a benchmark. Broadly speaking, the relative return is a measure of the gain or loss on an asset (e.g., a stock) or a group of assets (e.g., a fund or a portfolio) expressed in relation to that of a given market benchmark.

For a portfolio, it is the overall return measured against a theoretical passive reference portfolio or benchmark. Active portfolio management aims is to maximize the relative return of an actively managed portfolio against a passively managed portfolio. The relative return is an important yardstick for comparison of performance and can assist managers and investors in selecting components (asset allocation) and deciding the proper portfolio mix.

Compare: absolute return.