What is end of quarter "window dressing"?

Question

money market term

Answer 1

Window Dressing in this context is the 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. Performance reports and a list of the holdings in a mutual fund are usually sent to clients every quarter. To window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near the end of the quarter. These securities are then reported as part of the fund's holdings. Another variation of window dressing is investing in stocks that don't meet the style of the mutual fund. For example, a precious metals fund might invest in stocks that are in a hot sector at the time, disguising the fund's holdings, so clients really have no idea what they are paying for. Window dressing may make a fund appear more attractive, but you can't hide poor performance for long! If you're really interested, the site below is worth a visit.

Answer 2

It isn't a term about the Money Market -- it is about Financial Statements.

Window Dressing means that the company is taking some action that is economically meaningless or perhaps even costly to make its financial statements look better. For example, they may put off taking some expense until the day after the statements close so it looks like earnings are higher than they really are. Similarly, they may try to book sales before the end of the quarter instead of after.

Answer 3

Both the answers you have got are right, as far as they go. It can be used to mean changing the composition of a fund to disguise what the fund is actually doing from investors.

It is more common for the term to mean manipulation of accounts in various ways. Most commonly this means various techniques to make sales or profits look higher than they really are, or to hide liabilities.