Window dressing

Efforts on the part of institutional investors to influence the price of a stock over the short term with the intention of enhancing the performance of their fund as of a particular reporting date.

The performance of an investment fund is measured using a benchmark such as a stock or an index. At the end of the year, or just before a reporting date, institutional investors will try to exert a short-term influence on this benchmark by placing appropriate orders. If a fund has achieved an above-average profit for the year, the fund manager will attempt to depress its performance slightly during the final days of trading so that part of the profit can be shifted to the following year. If a fund is not performing particularly well, the fund manager may purchase individual securities, and thereby drive up their prices, in the attempt to maximise the fund's profit during the final days of trading.

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