The Averaging Mode can be chosen from several choices:

RMS Averaging        RMS averaging reduces signal fluctuations but not the noise floor. The noise floor is not reduced because RMS averaging averages the power of the signal. RMS Averaging is the most common type.
Peak-Hold                Peak hold averaging retains the peak levels of the measured spectra. Peak hold averaging is performed at each frequency line separately, retaining peak levels from one FFT record to the next.

Note:        All the FFT calculations are performed on the PC. The raw time-signals are transferred from the instrument to the PC, where the FFT and averaging calculations are performed.