.The Russell 2000 might possess a profits problem.Though the small-cap mark got 10.1% in July, it is actually fallen approximately 4% thus far in August, as of Thursday morning.ALPS' Paul Baiocchi achieves the unpredictable relocate to the index's total arrangement, along with an estimate coming from Beauty Global showing 40% of those providers possess bad profits." [Real estate investors] have actually generally resigned on their own to the reality that through being in the Russell 2000, I am actually simply heading to need to take the good with the poor," the company's main ETF planner informed CNBC's "ETF Edge" this week.To stay away from the earnings drag, Baiocchi suggests financiers focus on quality companies, considering additional careful exchange-traded funds including his organization's mountain range O'Shares united state Small-Cap Top Quality Reward ETF Reveals (OUSM)." The suggestion is actually high quality companies that pay for as well as increase their rewards, as well as significantly, possess a lot less volatility than their peers," he said. "It makes it possible for consultants and financiers that have found little caps go sideways for five years to become designated to a group that is actually dragged." Aside from its own success display screen, the fund consists of only 107 inventories u00e2 $" a fraction of what is actually inside the Russell 2000. Its top three holdings are Tradeweb Markets, Juniper Networks as well as Old State International, each resting at an about 2% weighting in the fund, per FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" exceeding the Russell through much more than 2 percentage factors during that time.Disclaimer.