.The Russell 2000 may possess an earnings problem.Though the small-cap index acquired 10.1% in July, it's fallen around 4% up until now in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the volatile moves to the mark's general arrangement, with an estimation from Apollo Global showing 40% of those companies possess unfavorable revenues." [Financiers] have essentially resigned on their own to the truth that by remaining in the Russell 2000, I'm merely mosting likely to have to take the good with the bad," the organization's main ETF schemer told CNBC's "ETF Upper hand" this week.To prevent the productivity burden, Baiocchi advises investors focus on top quality companies, looking at more particular exchange-traded funds like his firm's ALPS O'Shares USA Small-Cap High Quality Returns ETF Shares (OUSM)." The idea is top quality business that pay for and also develop their dividends, and notably, possess less volatility than their peers," he pointed out. "It permits advisors as well as financiers who have seen small hats go sidewards for five years to become assigned to a classification that's dragged." Besides its profits display, the fund includes simply 107 stocks u00e2 $" a fraction of what is actually inside the Russell 2000. Its best three holdings are Tradeweb Markets, Juniper Networks and also Old Republic International, each resting at an around 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to day u00e2 $" exceeding the Russell through much more than 2 percentage aspects during that time.Disclaimer.