In finance, a strategy used by mutual fund and portfolio managers near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders. To window dress, the fund manager will sell stocks with large losses and buy high flying stocks near the end of the quarter. These securities are then reported as part of the fund’s holdings.
This practice is largely done at the end of the year in order to retain investors and to get paid fees on performance.
