.The Russell 2000 may have an earnings problem.Though the small-cap mark acquired 10.1% in July, it is actually lost roughly 4% so far in August, since Thursday morning.ALPS' Paul Baiocchi earns the volatile moves to the index's total arrangement, with an estimation from Beauty Global showing 40% of those business possess negative incomes." [Capitalists] have actually essentially resigned on their own to the truth that through being in the Russell 2000, I am actually just visiting need to take the excellent with the poor," the firm's main ETF strategist told CNBC's "ETF Advantage" this week.To avoid the profitability burden, Baiocchi recommends capitalists prioritize quality firms, examining even more particular exchange-traded funds such as his firm's mountain range O'Shares USA Small-Cap Top Quality Reward ETF Allotments (OUSM)." The idea is top quality firms that spend and develop their rewards, as well as significantly, possess much less dryness than their peers," he mentioned. "It enables advisors and real estate investors that have actually found small limits go sidewards for five years to be alloted to a category that's delayed." In addition to its own profits screen, the fund has merely 107 sells u00e2 $" a fraction of what is actually inside the Russell 2000. Its top three holdings are Tradeweb Markets, Juniper Networks as well as Old State International, each sitting at an approximately 2% weighting in the fund, every FactSet.Shares of the small-cap fund are down 1.5% month to time u00e2 $" exceeding the Russell through much more than 2 amount factors because time.Disclaimer.