.The Russell 2000 may possess an earnings problem.Though the small-cap mark acquired 10.1% in July, it's fallen around 4% up until now in August, since Thursday morning.ALPS' Paul Baiocchi records the volatile relocate to the index's general composition, with a quote from Apollo Global presenting 40% of those companies have damaging earnings." [Clients] have actually primarily resigned themselves to the simple fact that through being in the Russell 2000, I'm merely mosting likely to have to take the really good with the bad," the firm's main ETF strategist said to CNBC's "ETF Edge" this week.To prevent the productivity pain, Baiocchi advises clients prioritize top quality business, taking a look at even more particular exchange-traded funds such as his company's O'Shares united state Small-Cap High Quality Returns ETF Shares (OUSM)." The suggestion is actually premium providers that pay out as well as develop their rewards, as well as essentially, have a lot less dryness than their peers," he pointed out. "It allows advisors as well as entrepreneurs who have actually viewed little limits go sideways for five years to be assigned to a type that's lagged." Along with its profitability display, the fund contains just 107 stocks u00e2 $" a fraction of what's inside the Russell 2000. Its best 3 holdings are actually Tradeweb Markets, Juniper Networks as well as Old State International, each sitting at an about 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" outmatching the Russell through greater than 2 percent factors during that time.Disclaimer.