.The Russell 2000 may have a profitability problem.Though the small-cap index gained 10.1% in July, it is actually fallen around 4% until now in August, since Thursday morning.ALPS' Paul Baiocchi earns the volatile moves to the index's total arrangement, with a price quote from Apollo Global showing 40% of those providers possess damaging revenues." [Investors] have actually essentially surrendered themselves to the truth that by remaining in the Russell 2000, I'm merely heading to have to take the excellent along with the negative," the organization's chief ETF planner told CNBC's "ETF Edge" this week.To steer clear of the profits burden, Baiocchi advises clients prioritize premium firms, looking at more selective exchange-traded funds like his firm's mountain range O'Shares united state Small-Cap High Quality Dividend ETF Reveals (OUSM)." The suggestion is premium business that spend as well as develop their dividends, and significantly, have less dryness than their peers," he said. "It makes it possible for advisors and also investors who have found little caps go laterally for five years to become assigned to a classification that is actually delayed." In addition to its success display, the fund consists of just 107 stocks u00e2 $" a fraction of what is actually inside the Russell 2000. Its best three holdings are actually Tradeweb Markets, Juniper Networks and Old Republic International, each resting at an approximately 2% weighting in the fund, every FactSet.Shares of the small-cap fund are down 1.5% month to time u00e2 $" outmatching the Russell by much more than 2 percent factors because time.Disclaimer.