MARKET returns on some Peel St businesses are outperforming the stock market, if the Peel Street Index is anything to go by.
The index, which was launched by Baiocchi Griffin Private Wealth last week, measures the performance of 17 Peel St businesses which are listed on the Australian Securities Exchanges (ASX).
Baiocchi Griffin director Justin Baiocchi said the index was a way of capturing the role that listed companies played in Peel St.
The index was created by identifying Peel St businesses listed on the ASX, then back-calculating the movements in share price and dividends paid by the companies.
It covers the past 13 years beginning from January 2000 and shows an increase of 175 per cent with average yearly returns of 12.5 per cent.
“That’s considering we had the global financial crisis in that period,” Mr Baiocchi said.
“Even though that had an impact, the businesses have been able to recover and keep pushing higher.”
Mr Baiocchi said he didn’t expect to see so many Peel St businesses listed.
About half of those businesses are major companies, including the four big banks, Wesfarmers, which owns Coles, Telstra and JB Hi-Fi.
“People tend to think that investing in the share market is a risky, complicated activity, but you’re really buying a small stake in businesses that we use on an everyday basis,” Mr Baiocchi said.
The Peel Street Index has seen good returns over the past year, with returns up by 45 per cent in the past 12 months, compared to the stock exchange’s 25 per cent increase.
“That’s consistent with the overall run of the stock exchange,” Mr Baiocchi said.
“All four big banks have had a good run over the past year and have announced profits, and retail has been strong for the past six months.”
Mr Baiocchi said the index would be updated every six months.