.The Russell 2000 might possess an earnings problem.Though the small-cap mark gained 10.1% in July, it's lost approximately 4% so far in August, as of Thursday morning.ALPS' Paul Baiocchi achieves the unstable relocate to the mark's overall composition, along with an estimation from Beauty Global presenting 40% of those providers have damaging profits." [Entrepreneurs] have actually basically resigned on their own to the fact that by residing in the Russell 2000, I am actually simply visiting have to take the excellent with the negative," the company's main ETF schemer informed CNBC's "ETF Edge" this week.To avoid the profits bother, Baiocchi proposes investors focus on high quality providers, considering even more discerning exchange-traded funds such as his company's ALPS O'Shares U.S. Small-Cap Premium Dividend ETF Portions (OUSM)." The idea is top quality business that spend and grow their returns, and notably, have a lot less dryness than their peers," he mentioned. "It enables consultants and also capitalists that have found tiny hats go laterally for 5 years to become assigned to a category that's lagged." Aside from its own profitability monitor, the fund consists of just 107 supplies u00e2 $" a fraction of what is actually inside the Russell 2000. Its top three holdings are Tradeweb Markets, Juniper Networks as well as Old Commonwealth International, each resting at an about 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" outmatching the Russell by more than 2 percent aspects during that time.Disclaimer.