Here is a simple example :
Assume that the mutual fund has an initial investment of 100 units with each unit is worth Rs 10. Hence, the total amount with the fund is Rs 10,00. Let us now say that this amount is invested in one share of Reliance (say Rs 5,20) and one share of Sify (Rs 4,40) and the balance Rs 40 is held in cash
(780+520+40-50) / 100 units = Rs 12.90
Thus the fund have achieved an absolute return of 29 per cent during the period. Pretty neat ..uh !!