Power Play: Small cap best cap?

Trader on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters
Trader on the floor of the New York Stock Exchange.

Not all the best deals lie with the big dogs.

Large capitalization equities have under-performed from the start of 2014 until the correction low of October 15. Compared to that, small and mid-cap equities "have been posting positive relative performance...off of relatively undervalued levels," according to Hugh Johnson, chairman and CIO of Hugh Johnson Advisors.

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"We expect small and mid capitalization equities to continue to outperform large capitalization equities through 2015," he told CNBC's "Power Lunch" on Friday.

But Johnson suggests limiting positions in small-cap equities to 6 percent of a portfolio's total and keep mid-cap equities to 12 percent.

"Given the relatively small positions, investors can have adequate diversification with both capitalization ranges by buying ETFs," he added.