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Clemens Sialm - The University of Texas at Austin, McCombs School of Business. Austin, TX, US

Clemens Sialm Clemens Sialm

Professor, Department of Finance | The University of Texas at Austin, McCombs School of Business


Investments, Mutual Funds, and Taxation


Areas of Expertise (4)

Asset Pricing Invesments Mutual Funds Taxation


Clemens Sialm is a Professor of Finance, the Eleanor T. Mosle Fellow, and the Director of the AIM Investment Center at the McCombs School of Business. He is also a Research Associate in the Asset Pricing and the Public Economics Programs of the National Bureau of Economic Research (NBER).

Sialm received a Ph.D. in Economics from Stanford University. Sialm's research interests are in the areas of investments, asset pricing, and taxation. He analyzes the investment strategies, the performance, and the behavior of institutional and individual investors. He also investigates savings and asset allocation decisions of retirement savers. His research has been published in the American Economic Review, the Journal of Finance, the Review of Financial Studies, Management Science, the Journal of Public Economics, and the Journal of Financial and Quantitative Analysis, among others. Sialm’s research has been frequently quoted in the Wall Street Journal, the New York Times, and the Economist. He recently obtained the Research Excellence Award from the McCombs School of Business.

Before coming to McCombs he taught at Stanford University and at the University of Michigan.





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The Floor-Leverage Rule for Retirement


Education (3)

Stanford University: Ph.D., Economics 2001

University of St. Gallen: M.A. (Lic. Oec.), Economics 1995

Gymnasium Kloster Disentis: Matura (Typus B), Economics 1991

Media Appearances (10)

Is It Wise to Retire With a Significant Amount of Debt?

The Street  online


In addition, the tax law also slightly reduced the incentives to contribute to tax-deferred retirement accounts, such as 401(k) and IRA accounts, due to the reduction in marginal tax rates, said Clemens Sialm, a professor at the McCombs School of Business at the University of Texas at Austin.

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Do 401(k) Providers Favor Their Own Funds?

The Wallstreet Journal  online


We spoke with Clemens Sialm, professor of finance at the University of Texas at Austin and a co-author of the study, with Indiana University’s Veronika Pool and Federal Reserve economist Irina Stefanescu, in the Journal of Finance.

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Is this how your 401(k) offerings are chosen?

CNBC  online


"Performance becomes a bigger factor in determining additions for unaffiliated funds than for affiliated funds," said Clemens Sialm, a finance professor at the McCombs School of Business at the University of Texas at Austin and a co-author of the study.

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Taxes Matter in Fund Investing, Even When There's No Bill

Dallas Morning News  online


Sialm co-authored a study that found that the U.S. stock funds that give the smallest tax bills to their shareholders routinely beat those that generate the biggest tax bills. The difference in annual returns is up to nearly 1 percentage point, and the margin is even wider after taking taxes into account. It’s the latest piece of research to suggest keeping costs low can lead to better returns in fund investing.

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This Is Your Brain on Money: How Investors Trip Themselves Up

The Wall Street Journal   online


For most of the companies in the study, running mutual funds was a relatively minor source of revenue. That suggests that the inflow of investor money wasn’t driving the parent company’s share price, according to Clemens Sialm, a professor at the University of Texas at Austin who co-wrote the study—which also included fund firms such as T. Rowe Price Group and Janus Capital Group.

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Powell: Don't let inertia sink 401(k) plans

USA Today  online


Others, however, disagree. "My recommendation is not to avoid all funds that are offered by service providers," says Clemens Sialm, an associate professor at the University of Texas at Austin and one of the co-authors of the study. "Often these are funds with lower expense ratios and superior diversification levels. "...

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Grand Central: The Internal, External Limits Facing BOJ Gov. Kuroda

The Wall Street Journal  online


It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) Plans. Mutual funds that manage 401(k) investments have “an incentive to include their own proprietary funds on the menu even when more suitable options are available from other fund families,” Veronika K. Pool, Clemens Sialm and Irina Stefanescu wrote in a staff working paper from the Federal Reserve. “Our results reveal significant favoritism toward affiliated funds. Affiliated funds are more likely to be added and less likely to be removed from 401(k) plans. The biggest difference between how affiliated and unaffiliated funds are treated on the menu occurs for the worst performing funds, which have been shown to exhibit significant performance persistence.”...

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Tax-Overlay Trading Boosts Returns

Barron's  online


He has a point. Between 1990 and 2012, investors in stock funds in taxable accounts gave up 1.12% of their average annual return to taxes, according to a study by Clemens Sialm and Hanjiang Zhang from the University of Texas at Austin...

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Value investing works. Why isn't it more popular?

The Globe and Mail  online


Other academic research, better focused on the process value investors follow, also showed that value investing works. Marcin Kacperczyk, Clemens Sialm and Lu Zheng, and Prof. Kacperczyk and Amit Seru, in two papers published in the prestigious Journal of Finance, examined whether skilled managers exist...

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Keeping Up With the Dow Jones

The Wall Street Journal  online


A 2000 paper in the Journal of Wealth Management by John Shoven and Clemens Sialm found that from 1928 to 1999, a cap-weighted Dow wouldn't have put in a markedly different performance from the actual Dow industrials...

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Articles (6)

Clemens Sialm Citations Google Scholar

Listing of top scholarly work by Clemens Sialm.

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Taxes, Shorting, and Active Management Financial Analysts Journal


We examine the consequences of short selling in the context of quantitative investment strategies held by individual investors in taxable accounts.

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Spillover Effects in Mutual Fund Companies Management Science


Our paper investigates spillover effects across different business segments of publicly traded financial con-
glomerates. We find that the investment decisions of mutual fund shareholders do not depend only on the
prior performance of the mutual funds; they also depend on the prior performance of the funds’ management

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It Pays to Set the Menu: 401(k) Investment Options in Mutual Funds Journal of Finance


This paper investigates whether mutual fund families acting as service providers in 401(k) plans display favoritism toward their own affiliated funds. Using a hand‐collected data set on the menu of investment options offered to plan participants, we show that fund deletions and additions are less sensitive to prior performance for affiliated than unaffiliated funds.

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Defined Contribution Pension Plans: Mutual Fund Asset Allocation Changes American Economic Review


In this paper we compare changes in asset allocations between mutual funds held in defined contribution pension plans and funds held by other investors. We investigate how flows into equity and fixed income mutual funds depend on macroeconomic conditions. We find that defined contribution plans react more sensitively to these conditions, suggesting effects on mutual fund managers and other investors.

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Mutual Fund Tax Clienteles Journal of Finance


Mutual funds are held by investors in taxable and tax‐qualified retirement accounts. We investigate whether the characteristics, investment strategies, and performance of mutual funds held by these diverse tax clienteles differ.

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