.The Russell 2000 might possess a productivity problem.Though the small-cap index got 10.1% in July, it's dropped about 4% up until now in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the inconsistent transfer to the mark's total composition, along with an estimation coming from Apollo Global presenting 40% of those providers have unfavorable earnings." [Capitalists] have actually essentially resigned themselves to the simple fact that by remaining in the Russell 2000, I am actually only going to need to take the great along with the bad," the company's main ETF planner said to CNBC's "ETF Edge" this week.To prevent the earnings bother, Baiocchi recommends entrepreneurs prioritize top quality business, checking out even more discerning exchange-traded funds including his firm's O'Shares USA Small-Cap Quality Returns ETF Portions (OUSM)." The tip is top quality companies that pay and also expand their returns, and importantly, have much less dryness than their peers," he said. "It enables specialists and also entrepreneurs that have actually observed tiny limits go sidewards for 5 years to be alloted to a category that is actually delayed." Aside from its own earnings display screen, the fund includes just 107 stocks u00e2 $" a portion of what's inside the Russell 2000. Its own best 3 holdings are actually Tradeweb Markets, Juniper Networks and Old Republic International, each resting at an about 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to time u00e2 $" outmatching the Russell through more than 2 amount aspects because time.Disclaimer.