.The Russell 2000 might have a profitability problem.Though the small-cap mark obtained 10.1% in July, it's gone down roughly 4% so far in August, since Thursday morning.ALPS' Paul Baiocchi achieves the volatile moves to the index's total arrangement, along with an estimation coming from Apollo Global revealing 40% of those providers possess negative revenues." [Real estate investors] have essentially resigned on their own to the truth that through being in the Russell 2000, I am actually just heading to need to take the good along with the negative," the firm's chief ETF strategist said to CNBC's "ETF Edge" this week.To avoid the success drag, Baiocchi suggests investors focus on top quality business, examining additional careful exchange-traded funds such as his organization's O'Shares united state Small-Cap Premium Reward ETF Reveals (OUSM)." The tip is actually quality providers that spend and also increase their dividends, and importantly, possess a lot less volatility than their peers," he stated. "It permits specialists as well as financiers that have found little hats go sideways for five years to become assigned to a classification that is actually lagged." Aside from its own profitability display, the fund contains merely 107 sells u00e2 $" a fraction of what's inside the Russell 2000. Its own top 3 holdings are Tradeweb Markets, Juniper Networks as well as Old Commonwealth International, each resting at an approximately 2% weighting in the fund, every FactSet.Shares of the small-cap fund are down 1.5% month to day u00e2 $" outshining the Russell by much more than 2 portion factors in that time.Disclaimer.