.The Russell 2000 may possess a profitability problem.Though the small-cap index gained 10.1% in July, it is actually dropped around 4% thus far in August, since Thursday morning.ALPS' Paul Baiocchi earns the unstable moves to the index's total arrangement, with a price quote coming from Apollo Global showing 40% of those firms possess unfavorable profits." [Entrepreneurs] have actually primarily resigned themselves to the reality that by remaining in the Russell 2000, I'm merely going to have to take the excellent along with the bad," the company's chief ETF schemer informed CNBC's "ETF Advantage" this week.To stay clear of the success nuisance, Baiocchi suggests real estate investors focus on premium business, examining more selective exchange-traded funds like his company's mountain range O'Shares U.S. Small-Cap High Quality Dividend ETF Portions (OUSM)." The idea is actually quality firms that pay for as well as increase their dividends, as well as notably, have a lot less dryness than their peers," he claimed. "It allows consultants as well as investors who have actually seen small hats go laterally for five years to be assigned to a category that's delayed." In addition to its profits display screen, the fund includes simply 107 supplies u00e2 $" a portion of what's inside the Russell 2000. Its own top three holdings are Tradeweb Markets, Juniper Networks and also Old State International, each resting at a roughly 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to time u00e2 $" outruning the Russell through much more than 2 percentage factors during that time.Disclaimer.