Total return swap

Total return swaps are agreements between two people or companies to exchange (or swap) the total return of one asset for the total return of a different asset. This means they agree to "swap" the money they make or lose from investments in their respective assets, such as stocks or bonds. This is done without actually buying or selling the underlying assets. Total return swaps help the two parties manage the risks associated with their investments, as they are able to balance out their risk by exchanging the total return from one asset for the total return from another. They can also be used to access investments that would otherwise be unavailable to one of the parties.