.The Russell 2000 may possess a profitability problem.Though the small-cap mark gained 10.1% in July, it is actually lost about 4% until now in August, as of Thursday morning.ALPS' Paul Baiocchi achieves the unpredictable moves to the index's total arrangement, along with a price quote coming from Beauty Global showing 40% of those companies possess damaging earnings." [Investors] have actually basically resigned on their own to the fact that through remaining in the Russell 2000, I'm only heading to need to take the excellent along with the poor," the company's chief ETF strategist informed CNBC's "ETF Advantage" this week.To avoid the profits bother, Baiocchi recommends investors focus on top quality firms, examining even more selective exchange-traded funds like his agency's ALPS O'Shares USA Small-Cap Premium Dividend ETF Shares (OUSM)." The idea is actually top quality companies that pay for and also increase their rewards, and essentially, possess much less dryness than their peers," he mentioned. "It makes it possible for advisors and also investors that have actually found little limits go sidewards for five years to become designated to a category that's lagged." Aside from its productivity display screen, the fund has simply 107 inventories u00e2 $" a portion of what is actually inside the Russell 2000. Its own leading three holdings are actually Tradeweb Markets, Juniper Networks and also Old Commonwealth International, each sitting at an about 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to time u00e2 $" outruning the Russell by more than 2 portion points because time.Disclaimer.