StockDriftsStockDriftsWe studied 5 years of Japan's large-shareholding filings from EDINET, covering 51,000+ buy-side filings from 5,900+ investors across 3,600+ stocks. Using fixed 30-day, 90-day, and 12-month forward returns, we measured which insider signals actually predict future stock performance.
Japan's equity market is structurally different from the US or Europe. Low analyst coverage, mandatory cross-shareholding unwinds, and Tokyo Stock Exchange reform pressure are creating persistent mispricing that active investors can exploit.
Over the past 15 years, 22% of active equity managers outperformed the benchmark in Japan compared to 11% in the US and 8% in Europe.
Share of funds outperforming benchmark over last 15 years
% of active equity managers outperforming benchmark
The sun is rising in corporate Japan again. The regime changes are re-shaping the arc for Japanese equities going forward; one that contrasts with the one that global investors have become accustomed to over the past three decades. It is time for investors to reconsider active management in Japan for a unique source of alpha for global portfolios.
— Franklin Templeton, "Rethinking Japan"
Average 12-month forward returns by investor star rating and market cap over the last 5 years
| Rating | Micro | Small | Mid | Large | All |
|---|---|---|---|---|---|
| 5-star | +82.0% | +48.6% | +55.1% | +54.8% | +60.2% |
| 4-star | +14.8% | +19.2% | +25.5% | +30.5% | +21.8% |
| 3-star | -4.2% | +10.4% | +10.6% | +18.8% | +10.5% |
| 2-star | -4.3% | +3.8% | +3.6% | +11.6% | -0.3% |
| 1-star | -11.5% | -12.0% | +7.4% | -13.8% | -10.8% |
5-star investors returned +60.2% at 12 months on average — and in micro caps, that number jumps to +82%. Meanwhile, 1-star investors lost -10.8%. The spread between the best and worst investors ranges from 13 to 31 percentage points at 90 days. Who is buying matters far more than what they are buying.
We analyzed 51,009 buy-side filings (purchases and initial disclosures) from 5,913 investors across 3,651 Japanese stocks filed between March 2021 and March 2026. Each filer with sufficient history is assigned a 1-5 star composite rating based on historical return performance, hit rate, and consistency. The 2,404 scored investors cover 92% of all filings.
The data comes from Japan's large-shareholding disclosure system (大量保有報告制度), which requires any investor crossing 5% ownership in a public company to file a disclosure on EDINET within 5 business days. Every subsequent 1% change triggers a new filing. These filings are public, mandatory, and contain the investor's identity, exact shareholding ratio, and stated purpose — creating a unique dataset of institutional conviction that doesn't exist in most other markets.
In Japan's large shareholding disclosure system (大量保有報告制度), when multiple entities agree to act together regarding share ownership, they must report as a group.
When is joint filing required?
Why does this rule exist?
The 5% threshold rule. If you (or your group) cross 5% ownership in a public company, you must disclose. Without joint filing rules, a group could split holdings across entities (2% each across 3 entities = 6% total) and avoid disclosure entirely. Joint filing prevents this loophole.
This analysis is for informational and educational purposes only. Past performance does not guarantee future results. Signal tiers are based on historical fixed forward returns and should not be used as the sole basis for investment decisions.
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