.The Russell 2000 might possess a profits problem.Though the small-cap index got 10.1% in July, it is actually fallen around 4% so far in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the unpredictable relocate to the index's total arrangement, along with an estimation from Apollo Global presenting 40% of those firms have negative incomes." [Real estate investors] have actually basically resigned themselves to the fact that by remaining in the Russell 2000, I'm just visiting have to take the great with the negative," the organization's main ETF strategist said to CNBC's "ETF Advantage" this week.To prevent the productivity pain, Baiocchi recommends financiers prioritize quality companies, examining more discerning exchange-traded funds such as his organization's O'Shares united state Small-Cap Top Quality Returns ETF Shares (OUSM)." The concept is actually top quality providers that spend and also increase their dividends, and notably, have less dryness than their peers," he said. "It allows advisors and also clients who have found tiny limits go sidewards for five years to be allocated to a category that's delayed." Along with its profits display, the fund consists of merely 107 sells u00e2 $" a fraction of what is actually inside the Russell 2000. Its top 3 holdings are actually Tradeweb Markets, Juniper Networks and Old State International, each sitting at a roughly 2% weighting in the fund, per FactSet.Shares of the small-cap fund are actually down 1.5% month to date u00e2 $" surpassing the Russell by much more than 2 percent points because time.Disclaimer.