.The Russell 2000 may have a profitability problem.Though the small-cap index gained 10.1% in July, it's dropped roughly 4% thus far in August, as of Thursday morning.ALPS' Paul Baiocchi records the unstable moves to the index's overall composition, along with an estimate from Apollo Global showing 40% of those companies have negative revenues." [Financiers] have actually basically surrendered themselves to the reality that through being in the Russell 2000, I am actually only mosting likely to must take the really good along with the poor," the agency's principal ETF planner told CNBC's "ETF Advantage" this week.To steer clear of the productivity pain, Baiocchi advises entrepreneurs prioritize premium providers, looking at additional selective exchange-traded funds including his organization's mountain range O'Shares united state Small-Cap Quality Reward ETF Allotments (OUSM)." The concept is quality firms that pay and increase their dividends, as well as essentially, have a lot less volatility than their peers," he said. "It permits consultants and also capitalists who have observed little hats go laterally for 5 years to become assigned to a classification that is actually dragged." In addition to its own profits display screen, the fund has merely 107 stocks u00e2 $" a portion of what's inside the Russell 2000. Its own best three holdings are actually Tradeweb Markets, Juniper Networks as well as Old Republic International, each sitting at a roughly 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" outperforming the Russell through much more than 2 portion factors because time.Disclaimer.