.The Russell 2000 might have a profitability problem.Though the small-cap mark acquired 10.1% in July, it is actually gone down around 4% until now in August, since Thursday morning.ALPS' Paul Baiocchi records the unstable relocate to the index's total composition, along with a price quote coming from Beauty Global revealing 40% of those companies have damaging earnings." [Clients] have primarily resigned on their own to the reality that by remaining in the Russell 2000, I'm only heading to need to take the excellent with the negative," the agency's principal ETF schemer informed CNBC's "ETF Advantage" this week.To stay away from the success nuisance, Baiocchi advises real estate investors focus on quality firms, taking a look at more careful exchange-traded funds like his firm's mountain range O'Shares U.S. Small-Cap Top Quality Dividend ETF Shares (OUSM)." The suggestion is actually high quality business that pay and develop their dividends, as well as significantly, possess much less dryness than their peers," he pointed out. "It permits advisors and financiers who have actually viewed tiny hats go sideways for five years to become allocated to a category that's dragged." Aside from its earnings screen, the fund contains simply 107 sells u00e2 $" a portion of what is actually inside the Russell 2000. Its leading three holdings are actually Tradeweb Markets, Juniper Networks as well as Old State International, each sitting at an around 2% weighting in the fund, per FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" exceeding the Russell through much more than 2 percentage factors in that time.Disclaimer.