Definition
Window dressing is when fund managers buy recent winners and sell losers just before quarter-end so their holdings reports look better. It's a form of portfolio manipulation that doesn't improve returns but may mislead investors about the manager's actual strategy. Regulations require disclosure of holdings at period-end.
Example
A fund sells its losing biotech position in late December and buys Nvidia to improve the appearance of its year-end holdings report.
FAQ
What is Window Dressing?
Buying winning stocks or selling losers before period-end reports.
Why is Window Dressing important?
Window Dressing helps investors evaluate portfolio management and make more informed decisions.