Cheap valuation levels on Germany's benchmark DAX Performance Index signal that investors haven't been complacent despite strong outperformance in recent years, according to data from Bloomberg.

The DAX is trading close to 13.2 times its expected profits over the next year. That's well under the MSCI World's 16.5 price to earnings ratio.

The DAX's lower-than-average price to earnings reading signals room to grow for the industrials-heavy index following the country's election on Sunday, Sept. 24, Saxo Bank sales trading head Andrea Tueni told Bloomberg.

The signal for further growth comes as German equities continue to soar under current leadership. The DAX has more than doubled in value since Chancellor Angela Merkel took over 12 years ago. Merkel is widely expected to win a fourth term leading Germany this weekend.

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The DAX traded slightly down 0.04% in late-afternoon trading in Germany on Friday.

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