.The Russell 2000 may possess a profitability problem.Though the small-cap index obtained 10.1% in July, it is actually fallen roughly 4% up until now in August, as of Thursday morning.ALPS' Paul Baiocchi records the unstable moves to the index's total arrangement, with a quote from Apollo Global revealing 40% of those companies have adverse profits." [Investors] have essentially surrendered on their own to the truth that by remaining in the Russell 2000, I am actually just mosting likely to have to take the really good along with the bad," the organization's principal ETF planner informed CNBC's "ETF Edge" this week.To stay away from the earnings bother, Baiocchi suggests real estate investors prioritize high quality providers, looking at additional selective exchange-traded funds such as his company's O'Shares united state Small-Cap Quality Dividend ETF Shares (OUSM)." The concept is actually high quality firms that pay and also expand their dividends, and significantly, possess much less dryness than their peers," he claimed. "It enables advisors as well as capitalists who have viewed tiny hats go sidewards for five years to become alloted to a type that is actually lagged." In addition to its own profitability display screen, the fund consists of simply 107 supplies u00e2 $" a portion of what's inside the Russell 2000. Its own leading three holdings are 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 date u00e2 $" outmatching the Russell through much more than 2 percent factors in that time.Disclaimer.