When a fund manager makes trades near the end of a reporting period to make the portfolio look better on paper. The goal is to impress investors by showing certain holdings in the financial statements, even if those trades are quickly reversed afterward. It does not reflect the manager's true investment strategy.
On June 30, a mutual fund holds many unpopular tech stocks that have lost value. Before sending out its mid-year report, the manager sells the bad performers and buys popular blue-chip stocks instead. After the report is sent in July, the manager sells the blue chips and buys the tech stocks back. The report made the fund look better than it really was.
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