.The Russell 2000 may have an earnings problem.Though the small-cap mark got 10.1% in July, it's lost about 4% up until now in August, as of Thursday morning.ALPS' Paul Baiocchi records the unpredictable relocate to the index's overall composition, with a quote from Apollo Global presenting 40% of those companies possess unfavorable revenues." [Capitalists] have primarily surrendered on their own to the truth that by residing in the Russell 2000, I'm merely heading to have to take the really good with the bad," the organization's chief ETF strategist told CNBC's "ETF Edge" this week.To avoid the profitability nuisance, Baiocchi recommends real estate investors prioritize quality firms, checking out even more selective exchange-traded funds such as his agency's O'Shares U.S. Small-Cap Top Quality Returns ETF Allotments (OUSM)." The concept is actually high quality firms that pay and develop their returns, and also importantly, possess less volatility than their peers," he claimed. "It permits specialists as well as real estate investors who have observed small limits go laterally for 5 years to become allocated to a group that's lagged." Besides its productivity display, the fund consists of only 107 inventories u00e2 $" a fraction of what is actually inside the Russell 2000. Its top three holdings are Tradeweb Markets, Juniper Networks and also Old Commonwealth International, each sitting at an around 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to time u00e2 $" outshining the Russell through much more than 2 percentage factors in that time.Disclaimer.