.The Russell 2000 may possess a profits problem.Though the small-cap mark gained 10.1% in July, it is actually gone down around 4% up until now in August, since Thursday morning.ALPS' Paul Baiocchi achieves the inconsistent relocate to the mark's overall arrangement, with a quote coming from Apollo Global showing 40% of those business have damaging earnings." [Capitalists] have generally resigned themselves to the simple fact that through being in the Russell 2000, I am actually only visiting have to take the excellent along with the bad," the company's principal ETF strategist informed CNBC's "ETF Upper hand" this week.To prevent the profitability burden, Baiocchi proposes financiers prioritize top quality firms, looking at additional particular exchange-traded funds including his agency's O'Shares united state Small-Cap Quality Dividend ETF Shares (OUSM)." The idea is actually quality firms that pay and also grow their returns, and significantly, have much less volatility than their peers," he pointed out. "It permits experts as well as investors who have actually found tiny limits go sideways for 5 years to become alloted to a group that's dragged." Besides its own profits screen, the fund consists of merely 107 supplies u00e2 $" a fraction of what is actually inside the Russell 2000. Its own top 3 holdings are actually Tradeweb Markets, Juniper Networks and also Old Republic International, each sitting at a roughly 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" exceeding the Russell by much more than 2 portion aspects in that time.Disclaimer.