.The Russell 2000 may possess a profits problem.Though the small-cap mark obtained 10.1% in July, it is actually lost roughly 4% until now in August, as of Thursday morning.ALPS' Paul Baiocchi earns the volatile transfer to the mark's general composition, along with a quote from Apollo Global showing 40% of those companies have bad revenues." [Financiers] have generally resigned on their own to the reality that through being in the Russell 2000, I'm simply going to need to take the great along with the bad," the agency's main ETF schemer informed CNBC's "ETF Upper hand" this week.To avoid the earnings nuisance, Baiocchi advises capitalists focus on high quality business, looking at more particular exchange-traded funds like his organization's mountain range O'Shares united state Small-Cap High Quality Reward ETF Reveals (OUSM)." The tip is high quality providers that spend and develop their returns, and significantly, possess a lot less dryness than their peers," he pointed out. "It enables specialists as well as capitalists who have actually observed tiny caps go sideways for 5 years to become assigned to a classification that's lagged." Besides its profitability screen, the fund has merely 107 stocks u00e2 $" a fraction of what's inside the Russell 2000. Its leading 3 holdings are Tradeweb Markets, Juniper Networks as well as Old Republic International, each resting at an around 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to day u00e2 $" outperforming the Russell through much more than 2 amount factors during that time.Disclaimer.