As regulators look to tighten up the mutual fund industry and instill greater investor confidence, they may have a difficult time proving that managers buying stocks to dress up a portfolio intend to deceive investors, Reuters reports

In window dressing, funds will drop losers from their portfolio at the end of a quarter, while adding others – all to look good in the quarterly report. The reason window dressing has become an issue is because by replacing losing stocks for cosmetic reasons at the end of a quarter, investors aren’t getting a true picture of the fund they are investing in.

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