.The Russell 2000 may have a profits problem.Though the small-cap index got 10.1% in July, it's dropped about 4% up until now in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the unpredictable transfer to the index's total arrangement, along with a quote from Apollo Global revealing 40% of those companies have bad revenues." [Financiers] have basically resigned on their own to the simple fact that by being in the Russell 2000, I'm just going to need to take the great along with the poor," the organization's main ETF planner informed CNBC's "ETF Upper hand" this week.To prevent the earnings pain, Baiocchi proposes capitalists prioritize high quality providers, looking at additional particular exchange-traded funds including his organization's mountain range O'Shares U.S. Small-Cap High Quality Reward ETF Portions (OUSM)." The idea is premium business that pay and also expand their rewards, and also notably, possess less volatility than their peers," he stated. "It enables specialists and capitalists that have observed little caps go sidewards for 5 years to become alloted to a category that is actually lagged." In addition to its own earnings monitor, the fund includes only 107 inventories u00e2 $" a portion of what's inside the Russell 2000. Its best three holdings are actually Tradeweb Markets, Juniper Networks as well as Old State International, each resting at an approximately 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to day u00e2 $" exceeding the Russell by greater than 2 percentage aspects in that time.Disclaimer.