.The Russell 2000 might possess a profitability problem.Though the small-cap index obtained 10.1% in July, it's gone down approximately 4% thus far in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the unpredictable relocate to the index's general composition, with a quote from Beauty Global presenting 40% of those providers possess adverse profits." [Entrepreneurs] have actually primarily surrendered themselves to the simple fact that by being in the Russell 2000, I'm merely going to have to take the really good along with the poor," the firm's chief ETF planner informed CNBC's "ETF Upper hand" this week.To avoid the success nuisance, Baiocchi suggests entrepreneurs focus on top quality providers, looking at more particular exchange-traded funds including his firm's O'Shares U.S. Small-Cap Quality Returns ETF Allotments (OUSM)." The tip is premium providers that pay and develop their rewards, and significantly, have less volatility than their peers," he pointed out. "It makes it possible for consultants and real estate investors who have actually found small limits go sidewards for 5 years to become designated to a category that is actually lagged." In addition to its earnings display, the fund includes only 107 sells u00e2 $" a portion of what is actually inside the Russell 2000. Its best 3 holdings are actually Tradeweb Markets, Juniper Networks and also Old Republic International, each resting at an approximately 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to day u00e2 $" surpassing the Russell through much more than 2 percent factors because time.Disclaimer.