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The removal by a mutual fund manager of one or more poorly performing stocks just prior to a performance review date.

In the investment world, there remain plenty of impenetrable phrases which make sense only to those in the know. A new one crossed my desk the other day. It was 'window undressing'. Like much, but by no means all, investment jargon, it originated in the US. The term applies to the practice of fund managers dumping unsuccessful investments before a review date. Thus, a fund manager might sell technology stocks on which there is a big loss immediately ahead of a quarterly review period so they do not appear on the portfolio valuation.

—"Investment View," Money Marketing, April 5, 2001

Ralph Acampora, technical analyst at Prudential Securities Inc., said he was 'pleasantly surprised' that the market held up earlier in the day despite the pressure from weak overseas markets, especially Japan. 'There's also the pressure from portfolio managers to unload unwanted stocks at the end of the quarter. Others call it window-dressing, I call it window-undressing,' he said."

— Frank Sakdalan, "Stocks end narrowly mixed," UPI, June 26, 1992

Today's phrase actually began life in investment circles as window dressing. Then a wag or two realized that since the fund managers are actually shedding poorly performing stocks, the phrase really ought to be window undressing. Good for them, I say. You can see one such wordsmith at work in the earliest citation, above.