.The Russell 2000 may possess a profits problem.Though the small-cap mark gained 10.1% in July, it is actually gone down about 4% up until now in August, since Thursday morning.ALPS' Paul Baiocchi chalks up the inconsistent transfer to the index's general arrangement, with an estimation coming from Beauty Global showing 40% of those companies have negative revenues." [Entrepreneurs] have actually primarily surrendered themselves to the reality that through residing in the Russell 2000, I'm merely heading to need to take the really good with the poor," the company's chief ETF planner told CNBC's "ETF Edge" this week.To prevent the earnings burden, Baiocchi recommends clients focus on top quality business, taking a look at even more particular exchange-traded funds including his company's O'Shares U.S. Small-Cap Premium Returns ETF Reveals (OUSM)." The suggestion is actually premium firms that spend as well as grow their dividends, and importantly, have less dryness than their peers," he stated. "It allows experts as well as clients that have observed little limits go laterally for five years to become designated to a group that is actually dragged." Besides its productivity display, the fund consists of just 107 sells u00e2 $" a fraction of what's inside the Russell 2000. Its own best 3 holdings are Tradeweb Markets, Juniper Networks and Old State International, each resting at an about 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to day u00e2 $" outruning the Russell by more than 2 amount factors during that time.Disclaimer.