.The Russell 2000 might have a profits problem.Though the small-cap index got 10.1% in July, it's gone down roughly 4% so far in August, since Thursday morning.ALPS' Paul Baiocchi achieves the unpredictable relocate to the index's overall composition, with an estimate coming from Apollo Global showing 40% of those business have adverse revenues." [Financiers] have actually generally resigned on their own to the truth that by being in the Russell 2000, I am actually merely visiting need to take the good along with the negative," the organization's chief ETF schemer informed CNBC's "ETF Edge" this week.To stay clear of the productivity pain, Baiocchi advises clients focus on premium companies, considering more selective exchange-traded funds including his firm's ALPS O'Shares U.S. Small-Cap Quality Returns ETF Reveals (OUSM)." The idea is quality providers that spend and expand their dividends, and also importantly, possess much less dryness than their peers," he stated. "It enables specialists and capitalists who have seen little caps go sidewards for five years to become assigned to a classification that's dragged." In addition to its profits display, the fund includes just 107 sells u00e2 $" a fraction of what's inside the Russell 2000. Its own leading three holdings are actually Tradeweb Markets, Juniper Networks as well as Old Republic International, each resting at a roughly 2% weighting in the fund, every FactSet.Shares of the small-cap fund are down 1.5% month to time u00e2 $" outmatching the Russell through much more than 2 amount factors in that time.Disclaimer.