.The Russell 2000 might possess an earnings problem.Though the small-cap mark acquired 10.1% in July, it is actually dropped about 4% up until now in August, since Thursday morning.ALPS' Paul Baiocchi achieves the inconsistent moves to the mark's total composition, along with an estimate coming from Apollo Global showing 40% of those business have bad incomes." [Entrepreneurs] have actually basically surrendered on their own to the reality that through remaining in the Russell 2000, I am actually only visiting must take the great with the poor," the firm's principal ETF schemer informed CNBC's "ETF Edge" this week.To prevent the profits bother, Baiocchi proposes clients focus on top quality companies, taking a look at more particular exchange-traded funds such as his firm's mountain range O'Shares united state Small-Cap Quality Reward ETF Portions (OUSM)." The suggestion is actually quality providers that pay as well as increase their dividends, and significantly, have a lot less volatility than their peers," he stated. "It enables consultants and financiers who have viewed tiny limits go laterally for 5 years to be designated to a classification that's lagged." Aside from its profits display, the fund has simply 107 sells u00e2 $" a portion of what's inside the Russell 2000. Its own best three holdings are Tradeweb Markets, Juniper Networks and also Old State International, each sitting at an about 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to day u00e2 $" outshining the Russell through more than 2 percent points because time.Disclaimer.