.The Russell 2000 may possess a profits problem.Though the small-cap mark gained 10.1% in July, it's dropped approximately 4% thus far in August, since Thursday morning.ALPS' Paul Baiocchi achieves the unstable relocate to the index's overall arrangement, along with an estimate from Beauty Global showing 40% of those firms possess adverse profits." [Real estate investors] have primarily resigned themselves to the reality that by being in the Russell 2000, I am actually simply going to need to take the good along with the bad," the agency's chief ETF strategist told CNBC's "ETF Upper hand" this week.To stay away from the success drag, Baiocchi advises financiers focus on quality companies, checking out additional careful exchange-traded funds including his firm's O'Shares U.S. Small-Cap Premium Reward ETF Portions (OUSM)." The idea is actually quality providers that spend and also develop their rewards, as well as importantly, have much less dryness than their peers," he said. "It enables consultants and financiers that have actually found small caps go laterally for five years to become designated to a category that's delayed." Along with its productivity display screen, the fund has just 107 inventories u00e2 $" a fraction of what's inside the Russell 2000. Its best three holdings are Tradeweb Markets, Juniper Networks and also Old State International, each resting at an around 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to day u00e2 $" outmatching the Russell by much more than 2 amount aspects during that time.Disclaimer.